Superannuation - SMSF Rules

Rules for SMSF Setup

Self Managed Super Fund Rules

Superannuation - SMSF Rules

Self Managed Super Fund rules are defined in the Superannuation Act 1990 and the Superannuation Industry (Supervision) Act 1993.

Keeping up to date with changing legislation is a vital aspect of managing your SMSF. We understand the legislative provisions and can advise you how you can comply with changing rules.

The following table provides an overview of the rules that need to be understood and complied with for your SMSF.

Section or Regulation Explanation
S17A The fund must meet the definition of an SMSF
S35AE The trustees must keep and maintain accounting records for a minimum of five years
S35B The trustees must prepare, sign and retain accounts and statements
S35C(2) The trustees must provide the auditor with the necessary documents to complete the audit in a timely and professional manner; and within 14 days of a written request from the auditor
S62 The fund must be maintained for the sole purpose of providing benefits to any or all of the following:
  • fund members upon their retirement
  • fund members upon reaching a prescribed age
  • the dependants of a fund member in the case of the member's death before retirement
S65 The trustees must not loan monies or provide financial assistance to any member or relative at any time during the financial year
S66 The trustees must not acquire any assets (not listed as an exception) from any member or related party of the fund
S67 The trustees of the fund must not borrow any money or maintain an existing borrowing (not listed as an exception)
S67A-67B The fund must comply with the limited recourse borrowing arrangement rules when borrowing to purchase single acquirable asset or replacement assets (not listed as an exception to the borrowing rules)
S82-85 The trustees must comply with the in-house asset rules
S103 The trustees must keep minutes of all meetings and retain the minutes for a minimum of 10 years
S104 The trustees must keep up to date records of all trustee or director of corporate trustee changes and trustee consents for a minimum of 10 years
S104A Trustees who became a trustee on or after 1 July 2007 must sign and retain a trustee declaration
S105 The trustees must ensure that copies of all member or beneficiary reports are kept for a minimum of 10 years
S109 All investment transactions must be made and maintained at arms- length — that is, purchase, sale price and income from an asset reflects a true market value/rate of return
S126K A disqualified person cannot be a trustee, investment manager or custodian of a superannuation fund
Sub Reg 1.06 (9A) Pension payments must be made at least annually, and must be at least the amount calculated under Schedule 7
Reg 4.09 Trustees must formulate, regularly review and give effect to an investment strategy for the fund
Reg 4.09A The assets of the SMSF must be held separately from any assets held by the trustee personally or by a standard employer sponsor or an associate of the standard employer sponsor
Reg 5.03 Investment returns must be allocated to members in a manner that is fair and reasonable
Reg 5.08 Member minimum benefits must be maintained in the fund until transferred, rolled over, allotted (to the member's spouse) or cashed out in a permitted fashion
Reg 6.17 Payments of member benefits must be made in accordance with Part 6 or Part 7A of the regulations and be permitted by the trust deed
Reg 7.04 Contributions can only be accepted in accordance with the applicable rules for the year being audited
Reg 8.02B When preparing accounts and statements required by subsection 35B(1) of the SISA, an asset must be valued at its market value
Reg 13.12 Trustees must not recognise an assignment of a super interest of a member or beneficiary
Reg 13.13 Trustees must not recognise a charge over or in relation to a member's benefits
Reg 13.14 Trustees must not give a charge over, or in relation to, an asset of the fund
Reg 13.18AA Investments in collectables and personal use assets must be maintained in accordance with prescribed rules

To develop and manage comprehensive SMSF strategies call us now on (02) 9821 2455 or complete our online enquiry form.

* We are not aligned to any financial planners. We will provide you independent advice on the advantages and disadvantages of setting up and using a Self Managed Superannuation Fund.

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