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Checklist for SMSF's

By Graeme Colley
Executive Manager, SMSF Technical and Private Wealth - SuperConcepts Sydney, Australia

The main advantage of an SMSF is that it allows you to control and direct the fund’s investments and fortunes. But there’s a catch. Don’t forget, as trustee it’s you that takes on all the responsibilities of running the fund even where you get the help of others. But you could cop it from the regulators and possibly other fund members if it all ends up in a mess.

This article provides a list of things to make sure the fund’s records are in good condition to help keep the fund’s administrator, accountant, auditor and the ATO happy. Remember, it’s better in writing rather than taking a rough second guess on what’s happening with the fund’s operations.

Setting up an SMSF

Making sure your SMSF has been set up correctly is important. It means you can gain access to the taxation advantages for contributions, the fund’s investment income and for paying benefits. Apart from needing a trust deed for the fund, you will also need to work out who will be the fund trustees and register the fund with the ATO. If you lack the experience or skills to run your SMSF you may find contacting an expert in the field can provide benefits for the fund.

Here’s some of the things you need find out to get your SMSF up and running.

When setting up your SMSF, have you:

  • Considered who will be members of the SMSF?
  • Decided whether the fund should have individual trustees or a corporate trustee?
  • Appointed the trustees or directors of the corporate trustee?
  • Found a suitable trust deed for your SMSF?
  • Established the fund by executing the trust deed?
  • Set up a bank account for the fund?
  • Registered the fund with the ATO?
  • Obtained an electronic service address so the fund can receive employer contributions from employers?


Contributions are an important part of the lifeblood of any superannuation fund. There are times when certain types of contributions can be accepted by the trustees of your SMSF and times when they cannot. Understanding when your fund is permitted to accept contributions can depend on your age, whether the contributions are made personally or employer contributions and, if the member is older than 65, they meet a work test to be able to contribute to your SMSF. From 1 July 2019 you may be able to use the carry forward unused concessional contributions from the 2018/19 financial year if you had no more than $500,000 in superannuation on 30 June 2019

Here are some things to check when accepting contributions for your SMSF. Have you:

  • Identified whether the contribution can be accepted by the fund because of the type of contribution, member’s age and work status?
  • Obtained information about the contribution to determine whether it should be included in your SMSF’s taxable income?
  • Received an election within the required time from members intending to claim a tax deduction for personal contributions?
  • Acknowledged receipt of the election to claim the tax deduction?
  • Recognised which contributions are counted against the concessional and non-concessional contributions caps and obtained the correct elections from member(s)?

Investment Strategy

An investment strategy sets out the investment objectives for your SMSF and the investment categories. All superannuation funds must have an investment strategy that has been put into action and reviewed regularly. Your SMSF’s investment strategy should be in writing and consider the personal circumstances of fund members, including their age, whether they are in accumulation and/or pension and their investment risk tolerance.

When you are developing your SMSF’s investment strategy, you will need to consider:

  • diversification of the fund’s investments including the range of assets as well as the asset classes such as cash, term deposits, equities, property, local and international investments,
  • liquidity of the fund’s investments so that they can be converted to cash to pay the fund’s expenses when required,
  • the ability of the fund to pay benefits to members when required and other expenses,
  • whether the fund should hold insurance cover for each member of your SMSF, and
  • whether your SMSF continues to reflect its purpose and any changes in the member’s circumstances.

When developing and implementing the investment strategy for your SMSF, have you:

  • Prepared an investment strategy for your SMSF?
  • Written down the investment strategy?
  • Considered your SMSF’s circumstances such as risk, diversity, liquidity as well as each member’s circumstances?
  • Considered insurances for members such as life insurance, temporary and permanent disability insurance or salary continuance insurance for members?
  • Arranged to have your SMSF’s investment strategy regularly reviewed?

Your SMSF’s investments

Your SMSF’s trust deed and investment strategy provide a guide on what it can invest in. This may permit a very wide range of investments that include public and private company shares, managed funds, private trusts, cash and term deposits as well as direct property. It could also include investments in artworks and collectibles.

If your SMSF makes investments to arm’s length third parties on commercial terms, there are few issues that need to be considered. But if your SMSF invests in, lends to or leases an asset to related parties such as family companies or family unit trusts restrictions may apply. These rules can be complex, and it may be worthwhile to seek the help of an SMSF expert to see whether your SMSF complies with the law.

When making investments for your SMSF, have you:

  • Reviewed your SMSF’s trust deed will allow the proposed investment?
  • Confirmed whether the investment is permitted by the fund’s investment strategy?
  • Checked whether there are restrictions or prohibitions applying if your SMSF went ahead with the proposed investment?
  • Ensured that the investment is on an arm’s length commercial basis?
  • Kept copies of documents and other records concerning the investments, especially those that may be with related parties?

Trustee Reporting

As an individual trustee or a director of your SMSF’s corporate trustee you are required to arrange for the preparation and lodgement of documents with the ATO as regulator of SMSFs. The documents include the fund’s income tax and regulatory returns, PAYG information and Transfer Balance Cap information. Linked with the documents is the need to appoint an auditor to the fund and in some cases to engage an actuary to provide a certificate for tax and solvency purposes.

Reporting to the regulators about your SMSF requires you to:

  • arrange for the preparation of accounts for your SMSF at the end of each financial year,
  • arrange for the preparation of your fund’s income tax and regulatory returns each year,
  • appoint an auditor to the fund,
  • obtain an actuarial certificate from a qualified actuary if your SMSF is required to use the proportional basis to calculate its taxable and tax-exempt income,
  • value the fund’s assets at their market value,
  • make sure that the minimum pension amounts have been paid to members for the financial year,
  • report debits and credits to the ATO for Transfer Balance Cap purposes when required,
  • notify the ATO of changes to the trustees or directors of the corporate trustee,
  • notify ASIC of changes to directors of the corporate trustee, and
  • retain the fund records.


Ongoing compliance with the tax and superannuation laws is essential if the fund is to retain the tax benefits that go with your SMSF. Compliance usually covers some broad categories; however, any breach of the rules can lead to penalties, the trustees being disqualified, or the fund being taxed as a non-complying superannuation fund.

Make sure you have:

  • regularly reviewed the fund’s investment strategy,
  • kept the fund’s assets and money separate from your personal assets and bank accounts,
  • made sure the fund’s investments comply with the tax and super laws,
  • received contributions that are permitted to be accepted by the fund,
  • paid lump sums and income streams correctly, and
  • kept records of the fund’s transactions including tax and regulatory returns.

Paying an income stream

The main reason for having superannuation is to pay lump sums and income streams. Before a lump sum or pension is paid a trustee needs to ensure the member has met a condition of release such as retirement or reaching 65, whatever comes first. Before an income stream can commence some calculations are required which are based on the value of the member’s accumulation account and their age. Each year a minimum amount of the income stream is required to be paid.

When commencing or paying an income stream from your SMSF, make sure:

  • the member’s account balance has been valued as required by the ATO’s market value guidelines,
  • the minimum amount of the income stream for the year has been calculated,
  • if the income stream is a transition to retirement income stream that the maximum pension amount has been calculated,
  • the income stream is being paid in accordance with the member’s instructions, and
  • the value of the income stream at the time it commences or is commuted (converted to a lump sum) is reported to the ATO for Transfer Balance Cap purposes.

Winding up an SMSF

Having an SMSF can be a lifetime or a lifestyle decision. But the time will arrive when you may decide to wind up your SMSF. Winding up could be due to a member’s death, loss of legal capacity or the fund has served its useful life and run out of money. The process of winding up can be a simple procedure and you may leave most of the work to your accountant, administrator or professional adviser.

When winding up your SMSF, have you:

  • Read the fund’s trust deed and other documents to see what’s required to wind up the fund,
  • Accounted for any income the fund expects to receive and pay any expenses that are due for payment?
  • Paid out benefits to members or roll them over to a fund nominated by the member?
  • Made sure your SMSF is prepared for the payment of any expenses that have been notified to the trustee?
  • Arranged for the preparation of the final set of accounts for the fund?
  • Arranged for the preparation of final income tax and regulatory returns for the fund?
  • Appointed an auditor to complete the final fund audit?
  • Paid any outstanding expenses such as income tax on the fund’s income?
  • Closed the fund’s bank account after all liabilities have been satisfied and income has been accounted for?
  • Notified ASIC if the fund has a corporate trustee which may be would up due to the finalisation of your SMSF?

Staying up to date by finding out more about SMSFs

You’ve got your checklist in place and understand what’s required, but how do keep up to date with all the changes that seem to be never ending?

There’s no denying it’s always been a challenge not only for you as trustee but also for professionals who don’t deal with super and SMSFs all the time. You may find that your adviser, accountant, auditor or fund administrator can provide you with a newsletter to let you know what is going on.

You can subscribe to the ATO’s newsletter which is published regularly and provides useful information on running an SMSF. If you are really serious you can always attend seminars and courses which are especially set up to learn about all the technical things for SMSFs. Have a look on the web and see what you can find that may suit what you are after.

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Graeme Colley, Executive Manager
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Important notes

While every care has been taken in the preparation of this article, AMP Capital Investors Limited (ABN 59 001 777 591, AFSL 232497) and AMP Capital Funds Management Limited (ABN 15 159 557 721, AFSL 426455)  (AMP Capital) makes no representations or warranties as to the accuracy or completeness of any statement in it including, without limitation, any forecasts. Past performance is not a reliable indicator of future performance. This article has been prepared for the purpose of providing general information, without taking account of any particular investor’s objectives, financial situation or needs. An investor should, before making any investment decisions, consider the appropriateness of the information in this article, and seek professional advice, having regard to the investor’s objectives, financial situation and needs. This article is solely for the use of the party to whom it is provided and must not be provided to any other person or entity without the express written consent of AMP Capital.


This article is not intended for distribution or use in any jurisdiction where it would be contrary to applicable laws, regulations or directives and does not constitute a recommendation, offer, solicitation or invitation to invest.

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