SMSF TRUSTEE RESPONSIBILITIES

What is a trustee?

A trustee is a person or company that holds and invests the fund’s assets for the benefit of members. Trustees cannot receive any remuneration for their duties and services as trustees.

Trustee eligibility:

Most cases, all members of the fund must be trustees, so it is important to make sure all members are eligible to be a trustee. Generally, anyone 18 years old or over and not under a legal disability can be a trustee of an SMSF unless they are a disqualified person.

What are the duties & responsibilities of a SMSF trustee?

You will be responsible for running the fund and making decisions that affect the retirement interests of each fund member, including yourself. You must comply with super and tax laws to make sure your fund is entitled to tax concessions and your members’ interests are protected.

Duties:

• Make sure your fund’s sole purpose is to pay retirement benefits to members of their beneficiaries in the event of the member’s death
• Accepting contributions and paying benefits according to the super & tax laws
• Making and documenting investment decisions and complying with any restrictions
• Making sure an independent auditor is appointed for each income year
• Completing administrative tasks, such as keeping records and lodging annual returns
• Reviewing and updating the fund’s trust deed and investment strategy on a regular basis
• Considering insurance for both fund assets and members
• Ensure the income tax return is prepared, audited and lodged to the ATO
• Tell the ATO within 28 days if there are changes to:
  • Trustees
  • Directors of corporate trustee
  • Members
  • Contact details
  • Address

You must also:

• Always act honestly
• Exercise the same degree of care, skill and diligence as an ordinary prudent person in managing your SMSF
• Act in the best interests of all fund members when you make decisions
• Manage the fund separately from your own affairs
• Retain control over your SMSF
• Develop and implement your SMSF’s investment strategy
• Not enter into contracts or behave in a way that hinders trustees from properly performing their duties or powers
• Allow beneficiaries access to certain information about the SMSF
• Make sure the money in the fund is only accessed if the laws allow it
• Keep administrative/non-financial records of the SMSF for a minimum of 10 years
• Keep financial and tax records of the SMSF for a minimum of 5 years
• Sign the trustee declaration form within 21 days of becoming the trustee of the SMSF

The ATO can impose penalties for breaches of trustee duties and responsibilities. From 1 July 2014, administrative penalties range from $850 – $10,200 per trustee

Steps a trustee must complete once the SMSF is legally established:

• Prepare an investment strategy
• Accept contributions and rollovers for the members of the SMSF
• Keeping records
• Appointing SMSF professionals
• Paying super benefits to members
• Planning for the future

If you have any queries or require further explanation of the information provided about please do not hesitate to contact your Accountant today.