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Completing your SMSF annual administration 

To ensure that you have complied with the rules of the SIS Act, a key element of being a trustee of an SMSF is the regulatory requirement to keep accurate accounting records and explain the transactions and financial position of your SMSF each year. This will also allow you to enjoy the tax concessions of superannuation.

 

The keeping of records generally includes:

- An annual operating statement, as well as a statement of the financial position of your SMSF (to be kept for at least 5 years)

 

- Easily accessible accounting records explaining accurately the financial position and transactions of your SMSF (to be kept for at least 5 years)


- A statement of the net assets of the SMSF and any changes that occurred to the net assets of the fund during that period

 

- Trustee documents, such as the trustee declarations of understanding of duties and solvency, minutes of trustee meetings and decisions, changes of trustee records, and consent to be appointed as a trustee (to be kept for at least 10 years)

 

- Any copies of annual returns that have been lodged with the ATO (to be kept for at least 10 years)

- All copies of any reports given to members (to be kept for at least 10 years)

An additional requirement is to lodge annual income tax and superannuation regulatory information with the Australian Tax Office via the "Fund income tax and regulatory return" system, as well as to have the Fund independently audited each year.

Regarding the latter requirement, there are a few ways in a trustee can accomplish this; either:

 

- use a personal accountant

- use an SMSF administration company

- do it all yourself

 

Very few trustees have the capacity to do it themselves (unless an accountant by profession) given what's involved, although there are multiple software packages out there that cater to DIY admin. Most trustees, however, either use a personal accountant or a specialist SMSF administration company. An accountant or SMSF administration company are generally outsourced when a financial planner is given the role.

While this is a rather straightforward overview, there are actually some significant differences in how SMSF administration can be completed, and there are a number of things that trustees need to be made aware of, to ensure they have an administrator that fits the intention of how the fund is to be run.

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