FAQ

If you purchase a trust deed from us you will have

  • up-to-date trust rules.
  • access to trust deed 24/7.
  • documents are in plain English and easy to understand.
  • your fund auditor will have confidence that the fund rules are complying and are up to date.

Yes-You can provide any name to your SMSF. However, most SMSFs have the family name as the name of the SMSF.

For example, If your name is Bob Brown, you could probably name your SMSF the Brown Super Fund or something to that effect.

Yes-an SMSF will need to get an ABN registration and elect to be an ATO regulated superannuation fund.

Yes-a member of an SMSF can be a non-resident. But care should be taken to ensure that the fund remains a “resident regulated superannuation fund’’ to avoid serious tax consequences.

Similarly, accepting contributions from a non-resident member can cause an SMSF to become a non-complying superannuation fund and get taxed at a higher rate.

It must have 4 (or fewer) members;

  1. Each individual trustee must also be a member;
  2. Each director of a corporate trustee must also be a member;
  3. No member can be an employee of another member - unless the two members are related; and
  4. No trustee can receive payment from the fund for their services as trustee.

Subject to a few limitations, most natural persons (which rules out companies and trusts) can become members. However, all members of the fund must be trustees of the fund (or directors of a corporate trustee) and all trustees must be members of the fund. The only exception is a single member SMSF.

Please view the question of trustee disqualification for more information.

The following persons are disqualified from acting as trustees of a SMSF. They are;

  • have been convicted of an offence involving dishonesty under a Commonwealth, State, Territory or foreign law.
  • have received a civil penalty order under the Superannuation Industry (Supervision) Act 1993 (SIS Act) .
  • are undischarged bankrupts.
  • have been disqualified by the regulator, for example the Australian Tax Office (ATO).

A company cannot act as a trustee of a superannuation fund if:

  • a responsible officer of the company is a disqualified person (a responsible officer includes a director, secretary or executive officer).
  • a receiver, official manager, administrator or provisional liquidator has been appointed to the company.
  • action to wind up the company has commenced.

Yes- a minor (person under 18 years) can be a member of a SMSF. However the member’s legal personal representative or the member’s parent or legal guardian must be a trustee or a director of corporate trustee in place of the member.

Yes-a single member can set up a SMSF. But the SIS Act requires that:

  1. If the trustee is a company, then the member must be:
    1. the sole director; or
    2. one of only 2 directors who are relatives; or
    3. one of only 2 directors and the other director must not be an employer of the member.
  2. If the trustee is an individual:
    1. the member is one of only 2 trustees who are relatives; or
    2. the member is one of only 2 trustees, and the other trustee must not be an employer of the member.

With our Trust deed, trustees can choose

  • any bank and any investment if allowed by its Investment strategy and SIS Act, basically trustees control the bank account and all investments,
  • any accountant, auditor, SMSF adviser, administrator or wrap account operator,
  • all investment decisions, management decisions, Pensions withdrawal decisions, within the SIS Act limits,
  • to keep the fund's records, minutes in any way they like,
  • Any life insurance policies, for its members.

Our Trust deed allow trustees to be paid

  • Allocated pensions,
  • Transition to Retirement Pensions,
  • Market linked pensions also known as TAP (term allocated pensions) up to the limit SIS Act allows (20th September 2007),
  • Continued defined benefit pensions to be paid which are wholly determined by reference to term life, period or life expectancy which commenced before they further pensions were disallowed by SIS Act,
  • Our current SMSF PDS includes all the budget measures announced on 10th May 2006 and will allow the new account based pension when legislated.

Our SMSF Trust Deed was prepared after the simple super rules were legislated on 15th March 2007. Our Trust Deed includes all the latest strategies and rules, such as:-

  • Market Linked, or Term Allocated Pensions - Transition to Retirement Pension (non-commutable pensions),
  • New Account Based Pension
  • Divorce and Super Splitting,
  • Government Co-contribution scheme,
  • Binding Death Nominations,
  • Interdependent Relationships for Beneficiaries,
  • Contributions Splitting to Spouse,
  • Removal of cashing restrictions for individuals over age 65 and not working.

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It is wrong to assume that Superannuation law regulates how a superannuation fund must operate, this role is of the Governing Rules of the fund which prescribes superannuation law to the fund.There are many areas of law such as the SIS Act, SIS Regulations, ATO decisions, Case law & common strategies which change after fund establishment and warrant the trust deed of the fund to be updated.

SMSF Trust Deeds should be up to date to ensure trustees have powers to benefit from all legislative changes. It is a myth that deeming clause in a deed which proclaims any change in law is automatically to be included in the deed, trustees must note that any relevant power or authority of the trustee must be conferred to them by its governing rules.

To be sure that the fund governing rules have all the necessary powers to administer the fund and to assure auditors that all actions taken by the trustee are supported by the funds trust deed, trustees must ensure that their fund's trust deed is always compliant with current legislation to avoid any administrative penalties.

Our SMSF trust deed was updated in January 2016 with the below changes:

# Reason for change Clause Result of change
1 Refund of non-concessional contributions 54 The deed now allows trustees to release excess non-concessional contributions and associated earnings, if requested by the member
2 Appointment of enduring power of attorney if the member loses mental capacity 28 & 38 Trustee must appoint LPR of a member as a Trustee of the fund, with giving immediate proper notice to the regulator where the member is under a legal disability or has lost legal capacity
3 Appointment as Trustee of Legal Personal Representative in case of death of member 28 & 38 Trustee must appoint LPR of a member as a Trustee of the fund, with giving immediate proper notice to the regulator where the member is deceased and there is no valid binding nomination in place and all the decisions regarding distribution of death benefit must be withheld till the LPR is lawfully appointed
4 Covenants to be in included 45 Tidying up Section 52B covenants to include role of an LPR once appointed as a trustee of the fund(duplicates) of the deed can be stamped for $20 each.
5 Accepting of contributions from a clearing house 49 To include acceptance of contributions for the new super stream rules
6 Creation of un-allocated contribution reserve accoun 74 & 75 As a result of withdrawal of ATO ID 2012/16 and introduction of ATO ID 2013/22 and the new NA T form to alert any contributions which were allocated to members in Y ear 2.
7 Non- deductibility of some insurance policies 66 Restriction by SIS Regulation 4.07D on commencing an insurance policy which other than those that are consistent with the conditions of release.
8 Contribution tax of high income earners 92 This is to allow Trustees to release the additional tax if requested by the member who is subject to Division 293 additional tax before reaching preservation age
9 Administrative Penalties to be paid by Trustees personally 95 The Trustees must follow education or rectification directions from the regulator and be personally responsible for any administrative penalties.
10 Assets of the fund to be valued at market value 90 Tidy up of clause for assets which are held by related trust should be shown at market value as per SISR 8.02B
11 Acquisition of assets from related super funds on breakdown of relationship 125 Trustee is now allowed to acquire an asset from a related party under the family breakdown conditions
12 Commutation of pensions up to unrestricted non-preserved component 131 This addition is for those funds which have members in transition to retirement phase and paying a pension between the preservation age (age 56 for 2015-16 year) to age 60 where the commutation lump sum can be elected to be paid as pension and is not taxable to the members up to the low –rate threshold.
13 New release authority – two years - for terminal illness 138 The new release authority now allows that benefits can be paid 2 years prior to the medical certificates date that is likely to result in death of the member
14 Change in contributions cap amounts 60, 62 & 64 Tidy up cap amounts for CGT , concessional and non-concessional for financial year 2015-16
15 SMSF must have assets to be entitled to an ABN 6 & 51 Trustee must make an irrevocable election to the regulator to be a regulated superannuation fund & hold cash contributions before opening a bank account and obtaining an ABN
16 SMSF must lodge an annual return 94 The fund must hold assets since 1st Jan 2015 and must lodge an Annual Return
17 Ability to claim ECPI if minimum pension standards are not met 181 This is to allow claiming ECPI under certain conditions when minimum pension is not withdrawn – such as withdrawn less than 1/12 of the minimum amount etc.
18 Actuarial Certificate requirements 181 Ability to claim segregation of assets for members who commence a pension part way in the financial year
19 BDBN for Pensioners 188, 190 & 200 Those pensioners who have tax dependants and drawing a pension with no reversionary beneficiaries are now able to have non-lapsing binding death benefit nominations.
20 Nomination of new reversionary beneficiary to an existing pension 175 Pensions which commenced prior to 1st Jan 2015 get special social security privileges,however if certain terms of the pension are changed, such as changing reversionary beneficiary would result in commutation of these old pensions. However now Trustees can allow a member to nominate a new reversionary beneficiary without commuting the old pension.
21 Ability to pay child pensions 188,190 & 200 Trustee now have powers to commence child pensions for those members who die with tax dependants who are over 18 and below the preservation age and with children can now commence child death benefit pensions
22 Requirement to amend investment strategy at the time LRBA 86 To ensure that the interest of the members who are in pension phase are not overlooked at the time of signing off LRBA loan documents – this is a requirement for most lending banks
23 Unwinding of custodian Trust at the time of repayment of loan 80 To allow trustees to acquire an asset from the custodian trust which needs to be dismantled as a result of repayment of LRBA loan, this is as a result of the new Section 71 (1) (f) of SIS Act where the related custodian trust is no longer treated as a related trust
24 Avoidance of NALI when LRBA borrowing from a related party is at more favourable terms 116 The trustee must not borrow from a related party on terms which are more favourable then market conditions to acquire an asset under LRBA – this will avoid any income from those assets to be taken as special income of the fund– NALI

In September 2015 the Auditing and Assurance Standards Board updated Guidance Statement GS 009 on Auditing Self Managed Superannuation Fund. Paragraph 65 refers SMSF auditors to a list of consideration in examining the SMSF' governing rules and suggests procedures that should be reviewed and adapted for the specific circumstances and audit risks associated with each SMSF audit engagement.

Below is the list with how our trust deed complies with the Appendix 3 of new GS 009 which should satisfy your SMSF auditor . The below information may be provided to your SMSF auditor , so that he can refer to the correct paragraph of this trust deed.

Ref Questions to be addressed in examining the trust deed Territory How our SMSF Trust Deed complies to this requirement
A ESTABLISHMENT AND EXECUTION  
A.1 Is the date of establishment of the SMSF recorded? Clause 1 and Schedule 1
A.2   Has the trust deed been
- Properly executed?
- Signed by all the members who are individual trustees?
- Witnessed?
- Dated?
- Stamped (if required)? 		Auditor to check if the deed is executed / witnessed and stamped if required.
A.3 Do the rules incorporate the SISA, SISR and applicable taxation rules? Clause 3, 7 & 8
A.4 Does the deed outline the core and ancillary purposes of the SMSF? Clause 4
A.5 Does the deed require an irrevocable election to be made to be a regulated superannuation fund or a fund subject to the SISA and SISR? Clause 6 including holding cash contribution to apply for an ABN
A.6 Does the deed have a clause which deems the appropriate legislation into or out of the deed to allow the SMSF to remain complying? Clause 7 & 8
B AMENDMENTS TO THE DEED  
B.1 Does the deed allow amendments? Clause 206 to 209
B.2 Has the trust deed been amended since the last audit? If so:
    Has the deed amendment been properly executed?
    Is confirmation of the deed's compliance with SISA and SISR required from        the solicitor
    or other party involved in the amendment?
    Is the amendment signed off by the current trustees?
    Could the amendments impact the audit? 		Auditor to confirm
C TRUSTEE AND MEMBERSHIP  
C.1 Does the trust deed specify who may be a trustee? Either:
- Two or more individual trustees or
- A trustee company 		Clause 25 specifies Section 17A of SIS Act

Disqualified person Section 120
C.2 Does the deed specifically identify the trustee as either individuals or a corporate entity? Clause 1, 25, 28 & Schedule 1
C.3 Are all individual trustees or directors of the trustee company required to be members? Clause 14, 15 & 16
C.4 Does the deed permit members to be
- A non-working spouse?
- A retired person?
- A child? 		Clause 14, 15,16, 55 - 59
Clause 14, 15 & 16
Clause 17 & 18
C.5 Does the deed limit the maximum number of members to 4 members? Clause 16
C.6 Is membership open to anyone else? Clause 14 and as long as the conditions under 17A are not breached.
C.7 Do the members of the SMSF meet the definitions?
- No member of the SMSF is an employee of another member , unless related.
- No trustee receives remuneration for their services to the SMSF in their     capacity as trustee. 		Clause 25
Clause 25
C.8 Does the trust deed contain the trustee covenants in s.52B of the SISA? Clause 45
D AUDIT AND FINANCIAL REPORTS  
D.1 Does the trust deed require the appointment of an approved SMSF auditor? Clause 98 -100
D.2 Does the trust deed require the trustees to prepare a financial report annually and for it to be audited? Clause 92 - 97
D.3 Does the trust deed require the trustees to keep the minutes and records of trustee decisions for at least 10 years and accounting records and signed financial reports for at least 5 years? Clause 96
E CONTRIBUTIONS  
E.1 Does the deed allow:
Concessional contributions, including:
- Employer contributions, including contributions made pursuant to a salary    sacrifice agreement?
- Member contributions for which a tax deduction is claimed?

Non-concessional contributions, including:
- Member contributions for which no tax deduction is claimed?
- Eligible spouse contributions?
- Contributions in respect of minors?
- Rollovers and transfers in?
- Government co-contributions?
- Contribution splitting to a spouse?
- Contributions by members who are under 65 and not working?
- Contributions by members who are working part-time and are over 65 and    under 75?
- Mandated contributions to be accepted at any age?
- Contribution splitting arrangements pursuant to family law matters? 		Clause 49, 60 - 61


Clause 49, 62 – 65





Clause 49
Clause 50
Clause 52, 77 - 79
Clause 49
Clause 55 – 59
Clause 60

Clause 60
Clause 60, Clause 121 - 128
E.2 Does the deed allow for in-specie contributions of assets to be made by members or related parties? Clause 51, 77 - 79
E.3 Does the deed permit spouse accounts and may employers make contributions to spouse accounts? N/A
E.4 Does the deed provide a basis for rejecting excess contributions? Clause 54
E.5 May excess contributions tax levied on the member be paid by the SMSF , irrespective of preservations rules and conditions of release? Clause 92 – Div 293 T ax
F BENEFIT PAYMENTS  
F.1 Does the SMSF require compulsory cashing of the members balance at a specific age? NO – only on conditions of release on request from the member Clause 129 or on death clause 166
F.2 Does the SMSF require a lump sum benefit to be paid in lieu of a pension? NO Only if requested by the beneficiary of a death benefit pension
G PENSIONS  
G.1 Does the deed expressly allow for payment of pensions by the SMSF . Including
- Account Based P ensions?
- TRIS?
- Allocated P ensions?
- T erm allocated or Market Linked or growth pensions?
- Non-complying lifetime or fixed term pensions? 		Clause 147 & 148
Clause 164 - 165
Clause 167 - 169
Clause 160 – 161
Clause 162 – 163
Clause 170 - 172
G.2 Does the deed allow for commutation of a pension? Clause 155 – 159
G.3 Does the deed allow for the segregation of assets to meet pension requirements? Clause 177 - 179
G.4 Does the deed make reference to nominated beneficiaries? Clause 173 - 176
H RESERVES  
H.1 Does the deed provide rules in relation to the establishment, maintenance and operation of SMSF Reserves? Clause 112 - 114
H.2 Does the deed require different or parallel investment strategies for each reserve account? NO
I INVESTMENTS  
I.1 Does the deed provide powers to the trustees to invest the assets of the SMSF? Clause 80
I.2 Does the deed specify specific assets/asset classes in which the SMSF may invest? Clause 80
I.3 Does the deed prevent investments in, or loans to, related parties? Clause 82
I.4 Does the deed require an investment strategy to be formulated, regularly reviewed, and given effect? Clause 83 - 86
I.5 Does the deed require the investment strategy to consider if insurance is relevant to the members of the fund? Clause 83
J BORROWINGS  
J.1 Does the deed prohibit borrowings? Clause 119 only when certain conditions are met under Section 67A and 67B of SIS Act
J.2 Does the deed permit borrowing in specific circumstances, including:
  Temporary borrowings which are required for the payment of member benefits,    short termsettlement of securities or superannuation contributions surcharges (no    longer levied)?Borrowings for limited recourse borrowing arrangements? 		Clause 119
K WINDING-UP  
Does the deed provide for the winding-up of the SMSF? Clause 210 - 212