SMSF Rules

Overview of SMSF Rules

Managing a self-managed superfund (SMSF) can be a rewarding way to take control of your retirement savings, but it comes with responsibilities. At Rise Accountants, we’re here to simplify the complexities of SMSF rules so you can focus on growing your wealth with confidence.

Whether you're exploring what is a SMSF, planning your own self-funded superannuation, or managing an established SMSF, Australia has many rules that need to be followed. So, understanding the rules is essential to ensure compliance and achieve your financial goals.

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"Ash, Tyler and Korey have been fantastic in helping us both with our personal and SMSF accounting. Love everything being via digital service - but if you have a question, they're more than happy to jump on the phone to have a chat. Cannot recommend them highly enough! Thanks team."

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Overview

What are the key SMSF rules?

1. SMSF Trustee Responsibilities

As a trustee of an Australian self-managed super fund, you’re responsible for managing the fund in the best interests of its members. This includes:

Keeping accurate financial records for at least five years.
Preparing and lodging an SMSF tax return annually.
Ensuring the fund operates solely for retirement benefits. This is known as the Sole Purpose Test.

What is the SMSF Sole Purpose Test?

The ATO stipulates that the sole purpose test means 'your fund needs to be maintained for the sole purpose of providing retirement benefits to your members, or to their dependants if a member dies before retirement.'

Non compliance is very serious. You could lose concessional tax treatment and trustees can face civil and criminal penalties.

You cannot directly or indirectly obtain a financial benefit when making investment decisions and arrangements (other than increasing investment returns to your fund). So for example, you can’t withdraw money from the fund to pay yourself a wage for managing your investments. If you are investing in collectables such as art or wine, you need to make sure that SMSF members don’t have use of, or access to, the wine or art.

The ATO further explains, ’Your fund fails the sole purpose test if it provides a pre-retirement benefit to someone – for example, personal use of a fund asset.'

2. SMSF Investment Rules

Your SMSF investment strategy must be documented and regularly reviewed. It should consider:

Risk and return for each investment
The need for diversification
The fund’s liquidity to meet ongoing expenses

All investment decisions must comply with the ATO SMSF Investment Strategy requirements:

All investments must be made at commercial ‘arm’s length’
The purchase and sale price of fund assets must reﬂect true market value
The income from fund assets must reﬂect a true market rate of return
You can't buy assets from, or lend money to, fund members or other related parties (there are some exceptions)
Your fund can't borrow money

3. SMSF Contribution and Benefit Rules

SMSFs are subject to strict caps on contributions:

Concessional (before-tax) contribution limit
Non-concessional (after-tax) contribution limit

View the latest ATO SMSF contribution limits.

Members can only access their benefits when meeting specific conditions of release, such as retirement or reaching preservation age.

4. SMSF Audit Requirements

Every SMSF must undergo an independent audit annually to ensure compliance. Our Rise SMSF team will liaise with the Auditor to make this an easy streamlined process. Trustees are also required to:

Submit an SMSF tax return to the ATO
Meet SMSF reporting requirements, including event-based reporting (e.g., pension commencements)

5. SMSF Insurance Requirements

Your SMSF must consider the insurance needs of members as part of its investment strategy. This may include life insurance, TPD (Total and Permanent Disability), or income protection.

6. SMSF Actuarial Certificates

If your SMSF includes a mix of accumulation and pension accounts, you’ll need an actuarial certificate to determine the tax-exempt portion of earnings, which Rise Accountants can help arrange.

Why Are SMSF Rules Important?

Compliance is strict, and important for all self-managed superannuation funds. Failure to adhere to the rules can result in significant financial penalties, including loss of the fund’s concessional tax treatment.

Knowing your obligations and working with experienced SMSF Accountants, such as Rise Accountants, is key to ensuring your fund remains compliant and continues working hard for you.

Additional SMSF Rules

ATO SMSF Info

To view the full list of self managed fund super rules, you can visit the ATO SMSF Hub here. Or contact us for a 15 minute complimentary Discovery Call for an personalised summary.

After appointing all your trustees and making sure they have signed the Trustee declaration, you have 60 days to register the SMSF with the ATO by applying for an ABN (Australian Business Number).

SMSF Lookup

The name of the SMSF that you put on the registration form, must be the same as the one in the trust deed.

Before creating your SMSF’s name, check that no-one else has the same or similar one via the Australian Government’s Super Fund Look Up website. If your name is too similar, it may slow down the processing of your registration.

You can also use the SMSF Lookup website to check the status of your fund’s registration. It will display as 'Pending' and if approved, 'Registered'. Employers and other super funds cannot transfer benefits to your fund until it is officially registered. This can take up to 56 days.

SMSF ABN Lookup

After your SMSF is registered, your ABN will be appear on the SMSF ABN Lookup directory.

How We Help

Helping you meet your Self Managed Super Fund requirements

At Rise Accountants, we specialise in simplifying the ever growing list of ATO & ASIC rules of managing an SMSF. Our team of SMSF accountants, Brisbane based, provide tailored support, whether you’re setting up an SMSF, refining your SMSF strategy, or managing ongoing compliance.

Our SMSF Services Include:

SMSF Setup and Registration: From SMSF registration to creating a compliant trust deed, we handle it all.
SMSF Accounting Services: We manage your SMSF administration, ensuring your fund meets all reporting and compliance obligations.
SMSF Tax Advice: Maximise tax benefits with expert advice on SMSF tax rates, GST, and SMSF capital gains tax discounts.
Audit Coordination: We work with independent auditors to ensure your fund meets all SMSF audit requirements.
Financial Planning and Retirement Planning collaboration: we work with trusted financial planners who build customised retirement strategy to maximise the benefits of your self-funded superannuation. When there is synergy in your team we all make your wealth go further.

Let’s Simplify Your SMSF Management

Managing a self-managed super fund Australia shouldn’t be a burden. At Rise Accountants, we’re committed to helping you navigate SMSF rules with ease. Contact us today to discuss your needs and see how we can help you achieve your financial goals.

Making The Decision

SMSFs can be a powerful tool for retirement planning and building a nest egg. They offer a unique opportunity for hands-on management and flexibility, but they also come with responsibilities.

If you're considering setting up a self managed super fund in Australia, or want guidance on whether it’s the right decision for you, Rise Accountants offer a free 15-minute Discovery Call to help answer your questions and explore the benefits and responsibilities involved.

Book Your Free Discovery Call

Are you looking for a team of expert advisors and strategists to help you rise to reach your Financial, Mind & Time freedom? Our team have what it takes to make a real difference through actionable insights and exceptional support. Book your free 15 minute discovery session to find out how we can help support you and your finances.

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Demystifying Self Managed Super Funds

SMSF Rules

Overview of SMSF Rules