The requirement for SMSF assets to be held in the name of the super fund and the proper establishment of the bank account through which the retirement savings vehicle will operate are two areas where the ATO is regularly witnessing compliance errors.
“Auditors often report contraventions to us where trustees fail to ensure assets are held in the fund’s name,” ATO SMSF trustee experience director Kellie Grant will reveal in a presentation for the upcoming SMSF Trustee Empowerment Day 2023 to be hosted by selfmanagedsuper’s sister publication, smstrusteenews.
With regard to this area of compliance in which trustees are often failing, Grant pointed out the specific actions that must be followed in order to adhere to the superannuation system rules.
“Depending on your fund structure, the [SMSF] assets should be held in the name of either the individual trustees as trustee for the fund or the corporate trustee as trustee for the fund,” she noted.
“In some states where it’s not possible to use the name of the fund for certain assets, you need to clearly show and document your fund’s ownership of that asset.”
She also noted the errors of a similar nature relating to the establishment of SMSF bank accounts.
“A common mistake is bank accounts set up in the name of just the individuals [involved] and not in the name of the individuals on behalf of the fund,” she said.
She added trustees should recognise these obligations are not just required on procedural grounds and have wider implications for the superannuants involved.
“It’s important to ensure correct ownership over fund assets in order to protect your retirement savings,” she stipulated.
Further, she issued a reminder of another action that must be taken once the SMSF bank account has been set up.
“You will then need to call us to provide the fund’s bank account or you can register for online services for business and provide your fund’s bank account via that [avenue]. Alternatively, your tax agent can provide it to us through online services for agents,” she said.
“And it’s important the bank account is unique, meaning it doesn’t belong to any other entity.”
To find out more about the ATO’s current areas of compliance focus, register here for SMSF Trustee Empowerment Day 2023.
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