There are several mistakes that are associated with the self-managed super fund and the main reason for this is because this is a tricky business that has a lot of traps. The trustees of the self-managed superannuation often find themselves in mistakes such as compliance. Do you know some of the biggest mistakes that SMSF is associated with? The aim of this article is to guide on some of the common mistakes associated with it.
1. Lending money to a fund member
This is one of the mistakes that the trustees find themselves and sometimes this is something that they can avoid because it may lead them into trouble. It is a mistake for the fund to lend money to a fund member. For example when you want your family member to buy a car and you lend her money from the SMSF at a commercial rate of interest. A self-managed super fund does not allow or lend money or provide financial assistance to a fund member or even to the relatives of the fund members.
2. Failure to supply the appropriate documentation to the auditors
Auditors may require all the documents used to lend money so that they can be able to know how money has been lend to whom it has been lend to. Therefore there are some vital documents that they may require for audit purposes or for verification and if you fail to supply them may land the trustees into trouble. The fund auditor may give a grace period of up to 14 days in order to be given the documents for auditing purposes.
3. Trustees not keeping all the minutes of the meeting
All the minutes of the meetings should be kept properly because they will be used in the next meeting for the purposes of reference and others. It is the role of the trustees to ensure that the minutes are kept properly and that they are complete. It is also important to know that these minutes should be kept for a minimum of 10 years or more because they may be required at one point in time. More details.
4. ATO trustee declaration not signed in time
This is another very big mistake that the self-managed super funds make but this is because of negligence and it can be avoided. This mainly happens when a member puts money into his or her relative’s self-managed super fund and this makes it hard to sign the application or the ATO trustee declaration. This mistake can be avoided if the ATO is signed in time and this should be 21 days before one becomes a trustee.
5. Failing to document changes of trustees
It is important for you to know when a fund member is not eligible to become a director or a trustee of a fund. The person has to consent in writing and it should be lodged with the ATO trustee declaration. A self-managed super should be managed properly or else you will find the trustee in a lot of mistakes and most of them will be those related to compliance. Learn more details at: http://smsfselfmanagedsuperfund.com.au/smsf-returns-beat-industry-funds/