SMSF trustee declaration: a quick guide

When setting up your SMSF, you must sign a SMSF trustee declaration that confirms you understand the responsibilities and duties involved in running a SMSF.

If you have set up a DIY super fund in the past 4 years or so, then you would be familiar with the SMSF trustee declaration.

A new trustee of a new or existing SMSF must sign a trustee declaration within 21 days of becoming an SMSF trustee stating that you: ‘understand my duties and responsibilities as a trustee or director of the corporate trustee of the self-managed superannuation fund named on this declaration . . .’.

The declaration is a curious document because its purpose is simply to confirm that you understand your responsibilities as fund trustee. As trustee, you’re still subject to these responsibilities even when you don’t sign the document. If you don’t sign the trustee declaration, however, you may be subject to penalties. More seriously, if your fund breaks the super rules, you (or your fund) can be subject to very serious penalties.

TIP: If you commenced your SMSF trusteeship before July 2007, then you won’t have signed such a declaration, but that doesn’t mean you shouldn’t be aware of what’s contained in such a document. The SMSF declaration is a very handy reminder of your responsibilities as a SMSF trustee, and I suggest that every trustee should obtain a copy. You can download a copy from the ATO website (publication number: NAT 71089). I also explain the trustee declaration in more detail in my book DIY Super for Dummies, 2^nd Australian edition (Wiley, publication date January 2012).

Before you sign the trustee declaration, you must read the ATO fact sheet ‘Self-managed super funds — key messages for trustees’ (NAT 71128). The fact sheet states that you’re responsible for managing your fund, and that you must understand your trustee duties and responsibilities, which include:

• Ensuring your SMSF is maintained for the purpose of providing retirement benefits, which is more commonly known as meeting the sole purpose test.
• Drafting the fund’s investment strategy and making investment decisions.
• Accepting contributions and paying benefits.
• Appointing an approved auditor for each income year.
• Lodging annual returns with the ATO and keeping fund records.

How to sign the SMSF declaration…

When signing the SMSF trustee declaration, you must ensure you insert the full name of your fund at the beginning of the declaration. You must then sign and date the declaration on page 2 of the form, and ensure you have a witness to your signature who also signs and dates the form. Your witness must be aged 18 years or over.

Related topics