SMSF compliance

Self-managed super funds (SMSFs) must comply with Australian superannuation legislation to be eligible for tax concessions. All super funds (including SMSFs) must be set up for the sole purpose of providing retirement benefits to members (or their dependants if fund members die before retiring). This objective should be outlined in the fund’s trust deed.

Fund trustees are responsible for ensuring that their fund passes the sole purpose test and that it complies with other superannuation legislative obligations, such as:

• residency requirements,
• developing an investment strategy and ensuring that all investment decisions are consistent with it,
• considering member insurance needs,
• only accepting contributions from fund members,
• only making super benefit payments to members who have met a condition of release,
• monitoring total super balance and transfer caps,
• administration, reporting and record-keeping requirements,
• appointing a registered auditor, and
• lodging the fund’s annual return to the Australian Taxation Office (ATO) and paying tax.

The ATO can impose a range of penalties on SMSF trustees who fail to meet their compliance obligations, depending on the severity of the non-compliance. It may be worthwhile for some trustees to obtain professional advice to help ensure their legal compliance.

Learn about the key aspects of SMSF compliance in the following SuperGuide articles: