Your self-managed super fund (SMSF) must meet strict investment rules before committing funds. Before you enter into any investment, make sure the arrangement complies with super and tax law.
An SMSF exists for the sole purpose of providing retirement benefits to members. You must ensure your investments do not give you, your relatives or other related parties a present-day benefit.
Your SMSF must not do the following:
- lend money or provide financial assistance to members or their relatives
- acquire assets from related parties, unless specific exceptions apply
- exceed the in-house asset limits
- enter into arrangements that do not follow arm's length rules.
Transactions with related parties must reflect market value. If an investment involves a related party or business activity, you should make sure you understand how the rules apply before proceeding.
If you fail to meet your obligations, you may face penalties, disqualification, or the fund losing its compliance status.
If you are considering an investment, take time to:
- review the investment restrictions that apply to SMSFs
- consider whether the arrangement provides a current day benefit
- ensure the structure and purpose of the investment are consistent with super law
- seek independent professional advice if you are unsure.
Understanding your obligations helps protect your retirement savings and supports the integrity of the super system.
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