When thinking of the future, it is only natural to want to find ways that would ensure safe days are ahead. As the saying goes, it is always good to save for rainy days, but while your current income may seem stable enough to secure your pension in the future, you never know what might happen. This is why the SMSF was created, to help people with their finances and rid them of the worry of money insecurity during old age.
As the name suggests, a self-managed super fund is a fund you get to manage on your own and this kind of strategy is a sure way of investing. The fund can have up to four members appointed as trustees which is also a great investment for the self-employed because superannuation personal contributions can be added and depending on the annual income of the trustees, these contributions can be claimed on the tax return.
It is good to learn a thing or two more so you will know what to expect and what you will be obliged to provide so the fund you set will be in compliance with the ATO (Australian Taxation Office) because you certainly would not want to face all the penalties, considering they are higher and stricter from this year onward.
When a certain breach does not follow the rules, the fines can vary from $900 up to $10,800. Another thing you must have in mind is, once you set up your SMSF, you have to make sure it is audited annually, during the year of income and after. While you may decide to outline the plan of the fund on your own, you have to rely on the help of professionals when it comes to auditing and hire an auditor. When you have found the trustworthy auditor, you will be explained the SMSF audit requirements that have to be fulfilled.
To be able to find the reliable auditor it is advisable to look through the certified list of registered auditors at ASIC (Australian Securities and Investments Commission) so you can rest assured your fund will be in safe hands. Before the audit begins, the auditor will require information about your transactions from the previous year. As with anything related to finances, you have to keep everything organised and provide the documents needed in case the auditor wants to look into certain matters in detail. When you find the reliable source explaining all the SMSF audit requirements, you may also be able to calculate your audit fee by an instant audit calculator.
The auditor has to have the knowledge and experience required and not be related to any of the fund trustees. During the audit, the trustees are given an engagement letter that outlines the steps of this process and ensures that the fund’s finances are in compliance with the laws, with the sole purpose of the fund in order. In the trustee representation letter trustees confirm all the statements regarding the finances are correct.
Since you have the chance to invest through your fund in properties and international shares, you will have to show all the documents to the auditor related to your investments, as well as those of mortgages and rents (if any). The auditor gives you the opportunity to see how your fund is going, whether there are some issues at hand that you will have to look into and establishes whether you are following ATO rules, thus you stay eligible for tax concessions. You have to bear in mind that in case of any issues, the auditor’s job is to report it to the ATO, so it is in your best interest not to hide anything from your auditor. Once the auditing is finished, the auditor gives full report on the findings.
