Top Compliance Mistakes

The Tax Office has published a list of the top compliance mistakes that SMSF trustees make when running their funds. 

Everyone makes mistakes. When it comes to preparing and lodging your self- managed super fund (SMSF) annual return, we know you want to get it right. To help, we've identified the top 5 mistakes made on SMSF annual returns (SARs) and how you can avoid them when lodging your SAR this year.

Bank account not unique to the SMSF

You need a bank account in your fund’s name to manage the SMSF operations and to accept contributions, rollovers of super and income from investments.

The account must be separate from your trustees’ individual bank accounts and any related employers’ or advisers' bank accounts. This will protect your fund's assets and ensure super payments can be made to your SMSF.

Providing an incorrect electronic service address (ESA)

An ESA allows your SMSF to receive electronic remittance advice and contributions if you have members receiving super from non-related employers.

An ESA consists of alphanumeric characters with a combination of upper and lower case characters and is case sensitive. It's not an email address or the contact details of the SMSF messaging provider.

Not valuing SMSF's assets at market value

SMSF assets need to be calculated at market value as at 30 June to prepare your fund's accounts, statements and SAR. If you follow our valuation guidelines, we'll generally accept the valuation you provide.

Accurate asset valuation is important to ensure your SMSF retains its complying fund status. Penalties may apply for inaccurate valuations as these can have an impact on your members' balances.

 

Trying to lodge with zero assets

An SMSF is not legally established until the fund has assets set aside for the benefit of members. We won't accept a SAR from an SMSF that has no assets unless the fund is being wound up.

If this is your SMSF's first year and you have no assets set aside for the benefit of members, you can ask us to either cancel your fund's registration or flag the SMSF's record as Return not necessary (RNN).

Lodging a SAR without auditor details

An approved auditor examines your SMSF's financial statements and assesses the fund's compliance with super law. An audit must be completed before your SAR can be lodged.

A SAR lodged without auditor's details, will be suspended and not recognised as a lodgment. This will impact the complying status of the fund until the SAR is lodged with the required information.

Appoint an auditor at least 45 days before your SAR is due, to ensure the audit is completed in time to meet the lodgment date.