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SMSF management

Summary of SMSF management.

Last updated 19 December 2016

Trustee structure

SMSFs can be established with either a corporate trustee (if all members of the SMSF are directors of the corporate trustee) or with individual trustees (if all members of the SMSF are trustees).

At 30 June 2016, 77% of all SMSFs had individual trustees, rather than a corporate trustee (see Appendix 1, table 6).

Of newly registered SMSFs in 2016, most have individual's trustees (93%); however there was an annual shift towards corporate trustees, with an increase to 7.2% from 5.4% in 2016 after a decline of 2.3% in 2015.

SMSF payment phase

For the year ended 30 June 2015, 52% of SMSFs reported they were solely in the accumulation phase, with the remaining 48% reporting they were making pension payments to some or all members, and so were considered to be in the pension phase. Of these, 11% were in partial pension phase (making payments to some members), while 37% were in full pension phase (making payments to all members) – see Appendix 1, table 7.

Over the five years to 2015 there was a shift of 7% of SMSFs moving into the pension phase. With most funds shifted from being in accumulation phase to the full pension phase (6%), while the proportion of SMSFs in the partial pension phase has remained consistent with an increase of 1%.

Of SMSFs that paid a pension to their members for the first time (22,300 SMSFs each year) on average 2,800 SMSFs were in their first year of operation.

Of SMSFs that started pension payments in 2015, approximately 50% were over five years old; 23% were under two years old (of which 10% were in their first year of operation); and 27% between two and five years.

Of funds established in the 10 years to 2015, 69% have not started making pension payments.

Service providers

All SMSFs must have their financial accounts and compliance with the SIS Act audited annually by an SMSF auditor. SMSF auditors play a key role in ensuring SMSF compliance with regulatory obligations.

For the year ended 30 June 2015, approximately 6,100 SMSF auditors conducted, on average, 74 SMSF audits each.

In 2015, there continued to be a trend towards SMSF auditors performing audits for a larger number of SMSFs, with most (53%) performing between five and 50 SMSF audits and between 51 and 250 SMSF audits (28%).

There were 5% of SMSF auditors conducting more than 250 SMSF audits. These SMSF auditors performed 44% of total SMSF audits in 2015, an increase from 34% of audits in 2011 (see Appendix 1, table 8).

In 2015 the proportion of SMSF auditors performing less than five audits decreased to 14%, continuing the trend of a decrease each year over the last five years. Less than 1% of total SMSF audits were performed by these SMSF auditors (see Appendix 1, table 8).

Tax agents and accountants also play a significant role in the SMSF sector. Approximately 13,600 tax agents or accountants lodged 99% of 2015 SMSF annual returns. They had, on average, 32 SMSF and a median number of 10 SMSF clients.

Half of the tax agents lodge for 10 or less SMSFs, while 15% (or 2,054) had a single SMSF client. By contrast, 7% or 931 tax agents and accountants lodged a 2015 SAR for more than 100 SMSFs (see Appendix 1, table 9).

Over the five years to 2015, there was a 3% decrease in the number of tax agents or accountants that lodged SMSF annual returns. This was attributed to a decrease in the number of tax agents or accountants that lodged SMSF returns for 2015 (by 600).

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