Every now and then I get a call from an accountant saying something like, “You audit over 70 of our SMSFs, but we have a problem with one fund.” Then they go on to say, “the trustees have… and I wonder if we get them to fix it by…., hypothetically how will that affect the audit?”
Some firms have reviewed SMSF prior to June 30, so the issue has been identified before year end and remedial action can be taken.
Sometimes it is post June 30, so we discuss what to do so we can advise the ATO the transaction was corrected as soon as identified. Sometimes accountants are floating a possible action, “in the event that…. How would you view this scenario?”
Question 1 – The fund only had one member and that person has now passed away. How do I wind up a fund?
A. This requires the accountant to speak with the executor and the deceased’s solicitor to check for any specific provisions in the will. Also, it is necessary to review what the Binding Death Nomination provides. Is it still operable? Then assets have to be realised, so funds can be paid to the appropriate people.
Question 2 – There is a residential investment property in the fund, can a family member live in it, provided market rent is paid?
A. No, they are a related party, so cannot have use of the asset. For real estate I ask to see a copy of the lease agreement, or if there is none, a declaration by the trustee that the tenant is not a related party.
Question 3 – My client is moving overseas permanently. What is the impact on their SMSF?
A. It is necessary to have someone resident in Australia with control of the SMSF, so an enduring Power of Attorney is required.
© David Saul – Saul SMSF
David was among the first professionals to be accredited through SPAA as an SMSF Specialist Advisor™. He is also a Chartered Accountant and holds a Bachelor of Financial Administration from the University of New England, Armidale NSW.
Please visit herefor further information.
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