SMSFs: Getting ready for the annual meeting with your accountant

The popularity of SMSFs has continued to grow, with over 600,000 funds as at March 2023. Around 27,000 new SMSFs were set up in the 2022 financial year alone.

This growth has led to significant changes in the way these funds are managed and the professionals who service the industry.

Accountants were traditionally the “go to” professional for SMSF trustees in order to meet the year-end compliance requirements for their SMSF, but this has been changing over the years.

SMSF trustees now have the option to engage specific administration service firms capable of offering daily updates if needed. This usually requires all fund transactions to be reported and recorded electronically, direct to the administrator who then uses industry-specific software to update the SMSFs position.

Alternatively, these providers may offer an annual, year-end administration service for trustees who don’t want or need that level of service.

As you would expect, these SMSF administration service providers don’t have the same level of close contact with the fund’s trustees that you would expect when engaging with an accountant directly, as they tend to administer your SMSF electronically or through data feeds and using quite advanced software to carry out their work.

Having said that, some of these external administration providers do offer a more “hands on” or personal approach where SMSF trustees are looking for that level of service.

Using an SMSF accountant and what you will need to provide

Engaging an accountant to assist with your SMSF usually results in a more personal service. They tend to know more about you and your overall financial position as they also often act in other aspects of your business or personal tax affairs.

When it comes to carrying out the administration for your SMSF, most accountants will provide a detailed list of the documentation that you may need to provide. The level of information required often depends on whether the accountant has carried out work for the fund in prior years.

To avoid delays and increases in costs, it would be best to provide all documentation as requested by your accountant with as much supporting information as possible.

To assist trustees in preparing for the fund’s year-end compliance tasks, we have provided a summary of the usual documentation requirements below. Keep in mind that your accountant may require additional information relevant to your particular SMSF.

Bank accounts and term deposits

• All bank statements for the year including the 30 June balance
  • Include notes or provide details for all transactions that have taken place and include any relevant documentation:
    • Contribution details
    • Pension payment details
    • Details for expense payments
    • PAYG tax payments/instalment activity statements
• Cheque book or deposit books if applicable
• All term deposit statements for any deposit held during the financial year including interest statements
• All term deposit renewal notices

Loans

• Copies of the loan agreement
• Interest received

Life and other insurances

• Copy of all insurance policies held

Collectable/personal use assets

• Information on any purchases or disposals during the year
• Copies of insurance documentation relevant to these assets
• Copies of lease/rental agreements (where relevant)
• Copies of storage expenses and location
• 30 June valuations
• Independent valuation for assets sold to related parties during the year

Listed shares

• All contract notes for purchases and sales
  • Broker transaction summary if relevant
• All dividend and holding statements for the year
• Copy of your stockbroker’s investment summary report if relevant
• For online broking accounts, a copy of the investment summary report that includes CHESS sponsored details
• All information relating to restructures, takeovers and buy-backs
• Copy of any relevant off-market transactions

Listed trusts

• All contract notes for purchases and sale of units
  • Broker transaction summary if relevant
• All trust distribution notices for the year
• Annual transaction summary statement
• Annual tax statement
• Copy of your stockbroker’s investment summary report if relevant

Unlisted shares and unlisted trusts

• Copy of all purchases or sales of shares or units
• Copies of share certificates or holding statements
• Copy of the entities’ financial statements (usually required for related entity investments)
• 30 June valuation information
• Dividend statements or distribution notices

Cryptocurrency or investment

• Information on all purchases and sales through existing or new ‘wallets’ – including a transaction summary
• Holding summary as at 30 June
• Market values as at 30 June

Property assets

• Rental income and expenses 
• Copy of lease or rental agreements
• 30 June valuation information
• For current financial year acquisitions:
  • Copies of the above
  • All purchase documentation including settlement and adjustment notices
  • Current title certificate
  • Fixture and fittings listings

Rollovers into the fund

• Copy of any relevant rollover benefit statement

Other fund documents (usually relevant for the first year of engagement)

• Copy of the fund’s trust deed
• Copy of the fund’s investment strategy
• Details of any changes to the fund’s membership
• Copy of minutes of trustee meetings