As of August 7, SMSF trustees have to adhere to a raft of new measures which are intended to address potential risks and strengthen the SMSF regulatory framework.
These measures mean SMSF trustees are:
- required to conduct a review of the fund’s investment strategy on a regular basis
- required to consider insurance for fund members as part of the fund’s investment strategy
- required to value the fund’s assets at market value for the purposes of preparing financial accounts and statements (consult this office to find out more about the valuation guidelines for SMSFs)
- required to keep money and other assets of the fund separate from any money or assets held by them personally or a standard employer-sponsor.
While trustees have always had an obligation to keep the money and other assets of the SMSF separate from those held by them personally, it was not enforceable until the Tax Office made it a prescribed operating standard – along with the other rules above – on August 7.
This means the Tax Office is now able to enforce compliance and trustees who contravene these standards run the risk of being fined up to 100 penalty units (one penalty unit is equivalent to $110).