In this guide
The use of reserves by self-managed super funds (SMSFs) is subject to strict scrutiny by the Australian Taxation Office (ATO), unlike other types of super funds which are regulated by the Australian Prudential Regulation Authority (APRA), not the Tax Office.
That means SMSF trustees need to be extra careful when using and allocating funds as reserves. They must clearly articulate the purpose for holding reserves and manage them in accordance with their fund’s investment strategy.
Learn more about SMSF compliance and trustee responsibilities.
What are ‘reserves’?
Reserves are simply assets or money held in a super fund that haven’t yet been allocated to a member or members. SMSF reserves are not counted towards any member’s balance until they are credited or allocated to them.
SMSFs are allowed to maintain reserves under the super rules, provided it is permitted in their Trust Deed.
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