5 steps to an easier SMSF
Is the thought of your next SMSF annual audit filling you with dread? Take the pain out of the process with these five simple steps.
1. Get your paperwork in line
It isn’t rocket science, but it’s still essential. Yet for many trustees the thought of getting 12-months’ worth of paperwork together can bring on a major fit of procrastination.
Fear of paperwork typically comes down to poor systems — or no systems at all. On the bright side, this is also an opportunity to make your life a whole lot easier in future. Start by asking your auditor for a detailed checklist of the documents you need, then think about how you can create and file them throughout the year, preferably automatically.
Need help? If paperwork really isn’t your forte, help is at hand. Find a specialist SMSF administrator to do the hard work for you.
2. Review your investment strategy
Your auditor will not only be checking that you’ve followed your written investment strategy, they’ll also want to be confident that it continues to meet member’s needs for the year ahead. So now is a good time to proactively review your investment strategy and make sure that it:
- Matches your members’ evolving risk profiles.
- Will continue to provide enough liquidity for drawdowns and expenses (especially if members are moving into pension phase).
- Adequately considers members’ insurance needs.
3. Check your property valuations
We all know that the price of property can change dramatically from year to year — especially in today’s market. So if your fund holds property, make sure your valuation is up to date and properly documented.
Need help? The valuation needs to be justifiable and may need to be carried out by a licensed valuer in some cases.
4. Make sure you’re meeting the pension rules
Is your fund paying an account-based pension to any of its members? If so, these payments must be paid regularly, and must be in line with the minimum pension payment rules.
Need help? Your financial adviser can help you with your pension payments — including any questions you may have about Centrelink entitlements for your fund’s members.
5. Get in early
Remember, your fund’s audit has to be complete before you can lodge your SMSF tax return — and you won’t receive any refunds until that’s done, including those valuable dividend imputation credits. The sooner you receive those refunds, the faster you can reinvest them and boost your retirement savings even more.
There’s nothing like a deadline to get you moving. So if you’re having trouble getting started, make an appointment with your auditor today.
Select your auditor carefully
ASIC’s annual report indicates that more than 300 SMSF auditors were deregistered in the 2014-15 financial year. Given this, it’s important to do your research to select an approved SMSF auditor that will perform their role adequately and meet professional standards.
About the author
David Busoli, National Manager of SMSF Education at AMP SMSF