What Are the Requirements for SMSF Auditing and Reporting?
A self-managed super fund (SMSF) is a private super fund that allows for more control over a person’s retirement savings. It is different from retail or industry super funds; this type enables individuals to choose investments and insurance.
An SMSF allows up to six members, with most having two or more. These members are trustees who are responsible for the fund. Although controlling one’s own super may sound enticing and beneficial, the individual must be ready to shoulder the responsibilities that come with it.
Having an SMSF is a significant commitment that entails a lot of work. With this, it’s necessary to know what obligations you will have to follow as a member.
What Are My Obligations as a Trustee?
SMSF trustees have many legal obligations that need to be met, ranging from reporting and record-keeping to administrative responsibilities. They must ensure that the fund complies with superannuation legislation and taxation. Otherwise, they are subject to penalties from the Australian Taxation Office (ATO).
Although it requires a significant amount of paperwork, keeping up with the obligations also ensures that the fund remains eligible for tax incentives under Australian superannuation law. For compliant super funds, member contributions and earnings have a concessional rate of 15% in Australia.
Hiring an Approved SMSF Auditor
SMSF members must appoint an auditor at least 45 before the due date of the annual return. It’s necessary to hire an independent auditor that must not have a financial interest or any personal relationships with the fund trustees. They will be required to register with the Australian Securities and Investments Commission (ASIC).
The auditors will be in charge of bookkeeping and assessment to check if the fund is compliant with superannuation law. They will request documents that need to be provided within 14 days. They also have the obligation to report any non-compliance issues to the trustees and the ATO.
Record-Keeping Duties
When working with SMSF auditors, it’s best to keep records in check to ensure quick and efficient completion of requirements. Doing so can help all parties involved save a significant amount of time and money.
General records include trust deeds, fund member information, a documented investment strategy, trustee declarations, registration documents, and the minutes of trustee meetings. These are necessary to provide complete and accurate information for the SMSF.
Financial year records are also essential for preparing financial statements, tax returns, and an annual audit. Required documents generally include the fund’s income, assets, member benefit payments, and deductible expenses.
Reporting Requirements
Once an SMSF member starts a retirement phase income stream, they must submit a transfer balance account report to the ATO. This report should include details about the income stream. From that point forwards, any event that may affect a trustee’s transfer balance must be reported.
Members must also report any changes to SMSF fund members/trustees to the ATO within 28 days.
Annual SMSF Supervisory Levy Payments
SMSFs need to pay an annual supervisory levy to the ATO. Trustees need to pay it in advance, meaning they must pay double the annual levy in the first year of the operation.
Hire SMSF Auditors in Australia Today
Managing an SMSF has many benefits, including more control over retirement savings. However, it does have its fair share of responsibilities. By keeping these obligations in mind, you can better ensure that you’re fully protected and compliant with the laws and regulations in place.
If you’re looking for SMSF auditors in Australia, SMB Accounting has you covered. Our professionals will provide you with highly efficient and comprehensive audit work, ensuring that all requirements are covered. Get in touch with us today!