If you want to keep enjoying the flexibility and control of your self-managed super fund, you'll need to make sure your fund is compliant at tax time.
Here's how to do it. Your self-managed super fund is a powerful investment tool, and a great way of saving for your retirement. But don't forget that as trustee, with control comes responsibility. And that means it's up to you to make sure your SMSF is complying with super and tax laws.
1. Give notice
If you're planning to claim a tax deduction on your personal super contributions, you'll need to complete a Notice of Intent with your personal income tax return. You can download this form from the Australian Taxation Office website. And if you're thinking about applying for a government pension, make sure you lodge this notice and claim your tax deduction before payments start.
2. Value your assets
You're required to value the assets of your SMSF at market value at 30 June each year in order to provide accurate and up-to-date information on your annual return. For tax purposes, market value is the amount a willing buyer of the asset could reasonably be expected to pay. If your fund has any in-house assets, you'll also need to have these valued. Make sure the market value of these investments is less than five per cent of the fund's total value or you could be hit with a fine.
3. Keep records
It's your responsibility to keep accurate records of your financial statements and tax returns, as well as minutes of trustee meetings and decisions. Get copies of all your statements and schedules, and keep these on file – so it's a simple matter of handing them over to your auditor when tax time comes around.
4. Get an auditor
You'll need to appoint a registered auditor to audit your fund every year. Allow at least 45 days before you have to lodge your SMSF annual return, to ensure your auditor has enough time to examine your financial statements. You can check your auditor is registered at the Australian Securities & Investments Commission (ASIC) website – if they are, they'll have an SMSF auditor number to include on your annual return.
5. Lodge a return
Once the audit is complete, it's time to lodge your SMSF Annual Return. You can either do this electronically through a tax agent, or by printing the form on the ATO website and mailing it back to the ATO. Don't forget that a new version of the SMSF Annual Return is released each year – so make sure you're using the correct one.
To find out more, please contact your financial adviser.
Source: MLC.Published: 10 June 2015