Keeping good records is more than just knowing which records to keep and for how long. It involves having a system for organising and maintaining records that makes it easier for you, and any SMSF professional you use, to:
- complete the fund's independent audit each year
- lodge your fund's annual return.
It may also help reduce audit and administration costs for your fund.
To help keep your records organised, you may want create separate files for your fund's more permanent records, and for records that relate to a specific financial year.
For example, in your permanent file you may want to keep:
- the fund's trust deed
- the fund's investment strategy
- details of the regular reviews of the fund's investment strategy, including the consideration of insurance for members of the fund
- reasons for decisions on the storage of collectables and personal use assets
- minutes of trustee meetings
- all signed trustee declarations
- records of trustees consenting to their appointment as a fund trustee
- records of all changes in fund members and trustees.
As each SMSF is unique, with its own investment strategies to achieve its objectives, you should consult with a professional licensed adviser when setting up a record-keeping system that suits your fund.
Keeping all relevant records together will simplify the process of compiling the records you need to give to your fund's independent auditor. If your fund regularly holds trustee meetings, you could create a separate folder for them, and sort them by date.
Media: Record keeping in your SMSF
https://tv.ato.gov.au/ato-tv/media?v=bd1bdiubfshbrtExternal Link (Duration: 2:22)
You should take minutes of all investment decisions, including:
- why a particular investment was chosen
- whether all trustees agreed with the decision.
This is because if you, as one of the fund’s trustees, invest the SMSF's money in an investment that fails, the other trustees could take action against you for failing to be diligent in your duties.
However, if your investment decision was recorded in meeting minutes signed by the other trustees, you will have a record to show that they agreed with your actions.
Under the super laws, SMSF trustees must sign their SMSF’s financial statements before finalising their annual audit. This includes an operating statement and a statement of financial position which must be signed by the required number of trustees or directors of the corporate trustee, as set out in the tables below.
Structure of the fund
Corporate trustee – single director
Corporate trustee – multiple directors
At least 2 of the directors
At least 2 of the trustees
Structure of fund – number of directors or trustees
Corporate trustee – one or 2 directors
Corporate trustee – 3 or more directors
At least half of the directors
Individual trustees – 2 trustees
Individual trustees – 3 or more trustees
At least half of the trustees
The most important reason for keeping good records is that it's a legal requirement for you to do so. You may also need to provide accurate records to us if we ask to see them.
You need to keep the following records for a minimum of 5 years:
- accurate and accessible accounting records that explain the transactions and financial position of your SMSF
- documentation showing decisions made about what benefit payment type was paid (pension, lump sum or a combination of both) and the account the payment was paid from
- an annual operating statement and an annual statement of your SMSF’s financial position
- copies of all SMSF annual returns lodged ̶ for more information see SMSF annual return instructions
- copies of transfer balance account reports lodged
- copies of any other statements you are required to lodge with us or provide to other super funds.
You need to keep the following records for a minimum of 10 years:
- minutes of trustee meetings and decisions (if matters affecting your fund were discussed, for example you reviewed the fund's investment strategy, or the commencement or commutation, in part or in full, of an income stream)
- records of all changes of trustees
- trustee declarations recognising the obligations and responsibilities for any trustee, or director of a corporate trustee, appointed after 30 June 2007
- members’ written consent to be appointed as trustees
- copies of all reports given to members
- documented decisions about storage of collectables and personal use assets.
Don't forget you also need to keep track of income tax record-keeping requirements, such as those related to deductions, capital gains and losses.
Keep records in writing and in English. If you keep electronic records, they must be capable of verification by us and be in a form we can access and understand.
For more information see event-based reporting for SMSFs.
SMSF members may be eligible for early access to super in very limited circumstances.
If you are a trustee of an SMSF, you must:
- ensure the member applying for early access of their super meets all the requirements for the particular condition of release applied for
- keep records and proof that the member met all requirements of the condition of release – this will be needed for your auditor to ensure the member did not illegally access their super
- seek permission from the other trustees and note this in the trustee meeting minutes.
If a fund member does not meet all the requirements of a condition of release, they may face heavy penalties for illegally accessing their super. The SMSF trustee may also face penalties for illegally releasing a member's super.How self-managed super fund (SMSF) trustees can meet their responsibility to keep accurate tax and super records.