How to Manage Your Self-Managed Super Fund Effectively

The Australian Tax Office provides a comprehensive guide to the trustee responsibilities for Running a SMSF. By adhering to the following rules you can help to keep your SMSF managed effectively:

• Documentation - There can be a large amount of documentation in relation to SMSFs and this can be onerous. It is extremely important to keep good documentation in order to comply with legislation as well as for your own reference. The best way to manage documentation is to keep on top of it. Each financial year start a new lever arch folder, have separate tabs for bank statements, share movements(buy/sells), dividends, trust statements, expenses etc. You should retain ALL documents related to the super fund and provide to Byrons at year-end.
• Income & expenses banking – All super fund related expenses/share purchases should be paid from the super fund’s bank account, likewise all super fund investment income etc must be deposited in the super fund bank account.
• Investment account names – It can often be difficult to know whose name the super fund’s investments should be in. It will depend on who the trustees are for the fund. If you have any concerns about the account names please contact Byrons and we can assist you.
• CHESS vs Issuer Sponsored – This is the investment number for share investments. If the choice exists, it is easier to use a CHESS number than issuer sponsored. This is because under CHESS you can have a single investment number across all of your shares rather than a unique number for each share. This makes it easier for both you and Byrons to find information on your share investments.
• Borrowing/lending – In most cases it is strictly forbidden and should be avoided entirely. There are very strict rules about borrowing and lending from a SMSF and can have significant repercussions if these rules are broken.
• Contributions – There are a number of different caps/limits on various types of contributions. These caps often change and should be monitored to ensure they are not exceeded.
• Pensions – The trustees need to ensure that they pay the pensions within the minimum and maximums as applicable. These amounts change every year and are provided on the member statements for the previous financial year. Pensions must be paid out of the super fund bank accounts in cash, therefore the trustees need to plan ahead to ensure there is sufficient cash to satisfy then pensions.