Managing an SMSF involves various components, each essential in ensuring that the fund remains compliant with legal regulations and reaches its investment goals.
- No: of SMSF registered: 6 00,000 as of 2021
- Count of members: 1.1 Million
- Average of assets managed: $1.1 Trillion
- SMSF manages over $800 billion in assets
- SMSF enjoy tax concessions of 15% on earnings rate and tax-free status for funds in retirement phase
- SMSF has added advantages, but managing costs might range from $2000 to $10,000 annually.
SMSF Accounting and tax reporting are key aspects of SMSF management. Accounting requirements in SMSF management include preparing financial statements, accurately maintaining essential records, and auditing funds by an approved SMSF auditor.
Tax reporting requirements in SMSF management include filing the SMSF annual return (SAR) with the Australian Tax Office (ATO), determining tax rates and capital gain tax and exempting the funds from tax in the retirement phase based on the proportion of assets supporting pension payments.
In this document, we have elaborated on the importance of outsourcing SMSF accounting and tax reporting and how it helps operational and cost efficiency.
We have also covered the importance of preparing and maintaining essential records for 5 and 10 years.
The consequences of not maintaining accurate and complete records in SMSF are
- ATO will impose penalties and fines on trustees who fail to meet record-keeping obligations
- Non-compliance in record keeping will lead to loss of tax concessions
- Incompetent records cause auditing issues, leading to audit process delays and scrutiny.
- Can cause operational challenges
- Poor record keeping causes reputational damage to those managing SMSF.
Also, we have covered the best practices achieved through outsourcing SMSF accounting and tax-reporting process. The best practices include the availability of industry expertise, maintenance of accurate records, regular reconciliation, distinctive fund transactions, annual assessments, achieving time management, creating error-free reports, cost efficiency, advanced technological proficiency and realizing scalability.
Sundaram Business Services is a business process outsourcing company with offices in Australia, India and the UK. With over 20 years’ experience in the Australian market in providing outsourced teams to Australian businesses across Accountancy, Portfolio Management, Self-Managed Super Funds, and Mortgage Broker Support, our business becomes an extension of yours.
