A Self Managed Super Fund (SMSF) allows individuals to manage their own retirement savings. Unlike industry or retail funds, SMSFs require adherence to strict ATO compliance standards, placing financial and legal responsibilities on trustees. Understanding these obligations is crucial for both new and existing SMSF trustees.
Trustees can be individuals or part of a corporate trustee structure. Eligibility includes specific qualifications, and all trustees must declare their duties and responsibilities. Breaches can result in ATO administrative penalties.
Sole Purpose Test: Ensures the fund provides retirement benefits.
Separation of Assets: Personal and fund assets must be distinct.
Investment Strategy: A documented strategy is necessary.
Annual Return and Audit: Lodging an annual SMSF return and undergoing an audit are mandatory.
No Lending to Members: Funds cannot lend to members or their relatives.
Arm’s Length Transactions: Ensures fairness in transactions, including Limited Recourse Borrowing Arrangements (LRBAs).
In-house Assets Cap (5%): Limits investments in related parties.
Investment Opportunities: SMSFs can invest in property, crypto, or artwork, but must comply with these rules.
|
Type of Contribution |
Cap (FY 2024–25) |
Notes |
|---|---|---|
|
Concessional |
$30,000 |
Taxed at 15% inside SMSF |
|
Non-concessional |
$120,000 |
Or $360,000 under bring-forward rule |
Age rules, work tests, and downsizer contributions also apply. More details can be found on the ATO contribution caps page.
Preservation Age: Determines when benefits can be accessed.
Conditions of Release: Specific circumstances allowing fund access.
Account-based Pensions: Guidelines for payments.
Minimum Pension Withdrawals: Defined rates must be followed.
An independent audit is required annually, with SMSF returns due on specific dates. The auditor and SMSF accountant play critical roles, supported by tools like the Electronic Service Address (ESA).
ATO Penalty Units: As of 2025, each unit costs $313.
Trustee Disqualification: Possible for serious breaches.
Rectification Directions: Actions required for non-compliance.
Asset Freezing: Can occur for significant infractions.
Civil and Criminal Penalties: Applied in severe cases.
Mixing personal and fund money
Missing audit deadlines
Investing in property for personal use
Failing to update the trust deed
Not documenting decisions
Collaborate with SMSF tax agents or administrators to ease compliance. Utilize cloud accounting and platforms like Class Super/BGL, and maintain thorough records of all decisions and valuations.
Nanak Accountants & Associates offer expert SMSF compliance, setup, and auditing support. Schedule your free consultation today.
The information on this website is for general informational purposes only and should not be considered financial, taxation, or legal advice. While we strive for accuracy, Nanak Accountants does not guarantee the completeness or reliability of the content. Laws and regulations change over time, and we recommend consulting a qualified professional before making any financial or business decisions. Nanak Accountants is not liable for any loss or consequences arising from reliance on this information. For personalised advice, please contact Nanak Accountants directly.
