SMSF Independent Auditing

Services
TABS Super Fund Auditors

A smsf is set up every 13 minutes in Australia can your a

uditor keep up with demand?
With self managed super funds increasing in popularity, some
reports indicate that there is a SMSF set up every 13 minutes i
n Australia.
This means that accountants have an awful lot of work to do
on behalf of their SMSF clients. Are you up to speed with com
pliance? Can your auditor keep up with demand?
Each year the ATO publishes the top ten compliance errors
hat are worth reminding yourself about.

http://www.tabs.net.au/smsf-set-every-13-minutes-australia-can-auditor-keep-demand

The largest compliance mistakes involve:

In-house assets
Separation of assets
Loans to members/financial assistance
Administrative-type contraventions

Its worth reiterating the sole purpose rule in light of

these compliance errors.
SMSF investments must be for the sole purpose of
providing retirement benefits for the members of th
e fund. Members, relatives or associates of the Trust
ees must not gain any immediate benefit from the
funds assets or activities. For example, any residenti
al property owned by the fund cannot be used by t
he fund members or their families, even if rented o
ut at market rates.
http://www.tabs.net.au/smsf-set-every-13-minutes-australia-can-auditor-keep-demand

There are huge tax penalties for making this error. Regulator
s have stated that the sole purpose test is of high importance
when it comes to determining if a SMSF is a complying fund.
A complying fund is taxed at 15 per cent while a non-complyi
ng fund is taxed at 47 per cent.
The sole purpose test is divided into core and ancillary purpo
ses. A regulated fund must be maintained for at least one cor
e purpose OR at least one core purpose and one or more an
cillary purposes. However a fund cannot be maintained for o
ne or more ancillary purposes only.
http://www.tabs.net.au/smsf-set-every-13-minutes-australia-can-auditor-keep-demand

What is a Core purpose?

Providing benefits to members on or after retirement from
gainful employment.
Providing benefits to members when they have reached a
prescribed age, or
Providing benefits in respect of members on the members
death prior to retirement or reaching the prescribed age.
Whats an Ancillary purpose?
An Ancillary purpose includes the provision of benefits for me
mbers in the following circumstances:
On or after the termination of the members employment
with an employer who had contributed to the fund for tha
t member
Cessation of employment due to ill-health (physical or men
tal).
Death of the member after retirement or attaining a prescr
ibed age
http://www.tabs.net.au/smsf-set-every-13-minutes-australia-can-auditor-keep-demand

Need to speed up your audit flow?

If you have any questions about SMSF i
ndependent auditing, or feel you need
a faster turn-around on your audits, or
just need some clarity on the sole
purpose rule, contact me,
Catherine Price
at TABS Super Fund Auditors
02 9520 7193