06 Nov Keeping your SMSF compliant with the ATO
If you have a Self Managed Super Fund (SMSF), it is very important that you understand your obligations to ensure that you keep on the right side of the ATO and avoid hefty fines. Here are some of the most important facts you should know about running a SMSF:
1. Understand SMSF withdrawal rules
Just because you have a self managed super fund, it doesn’t mean that you’re able to withdraw your super whenever you like. As with non-SMSF super, there are strict rules about when and how you can withdraw your super retirement funds (read our free Transition to Retirement Ebook for more information about accessing your super prior to retirement). If you’re caught contravening these rules, you can face significant penalties from the ATO. There have been instances where people have been caught out buying into early super release schemes – make sure you don’t become a victim.
2. Prohibited lending and assets
Super funds are prohibited from certain types of lending and asset portfolios. As an example, self managed super funds are not allowed to lend money to members of the fund. Loans to or investments to related parties (known as ” in-house assets”) cannot make up greater than 5% of the assets of a fund.
3. Annual audits by an approved auditor
If you run a self managed super fund, it is your responsibility to make sure that your SMSF is audited each year by an approved auditor. Your auditor will conduct a financial and compliance audit of your superannuation fund. This enables your auditor to ensure that your SMSF complies with the superannuation rules. The ATO has recently been undertaking audits of approved auditors to ensure that they are fulfilling their duties appropriately.