Interestingly, some SMSFs have good and detailed annual accounting records, but their Permanent File is almost non-existent or quite often incomplete. Then it becomes necessary to track down what actually exists of the Permanent File. This can become quite time consuming as many accountants and their SMSF clients (or trustees) have never had the need for a quality Permanent File explained.
Ideally the Permanent File has been built up from the establishment of the SMSF, though items may be missing. Many items can make up the Permanent File. Some important items include the following.
- Trust Deed and Any Amendments
- Documents relating to Pensions
- Constitution for Trustee Company, if one has been used
- Minutes of SMSF
- Binding Death Nomination(s)
- Insurance Policies
- Investment Strategy – including the decision(s) to hold or not hold insurances for members
- Prior Year Financials and ITR’s
- Members Details
- Art Works Declarations and Minutes on the storage decision
- Details of Any Rollovers into the SMSF
- Certificates of Title for SMSF Assets
Sometimes, documents may be there, but unsigned. Indeed no copy may ever have been signed, though in that case one would question the bona fides of the Fund.
It is expected most Permanent Files will be in electronic form, consisting of scanned signed documents, so as to make it easier to update and share with the client and auditor.
Having built a complete Permanent File, then copies could be supplied to the auditor each year, a copy retained by the firm and also supplied to the client.
© David Saul, Saul SMSF, www.saulsmsf.com.au
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