Self-managed superannuation funds (SMSFs) can offer significant flexibility.
They allow the members to make investments and enter arrangements that may not be available through retail or industry superannuation funds.
However, being an SMSF trustee does come with important responsibilities to ensure that all dealings comply with superannuation law.
Two critical areas to keep front of mind are:
- The sole purpose test, which requires that superannuation funds should be managed for the sole purpose of providing retirement benefits to fund members. While some SMSFs may have dealings with or investments in related entities, these are subject to strict limits and when arrangements are entered into. It is important that first and foremost SMSF trustees are considering the retirement benefits of the fund members, rather than the needs of any external parties.
- Arm’s length requirements – in addition to the sole purpose test, there are superannuation and taxation law requirements that SMSF trustees always deal on arm’s length commercial terms. This is again particularly important when arrangements are with fund members and/or related parties.
Katrina Brennan, Director, SRJ Walker Wayland Business Growth Advisors, Accountants and Auditors. Level 2/2 Innovation Pkwy, Birtinya, 5301 9957, srjww.com.au.
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