1. Peter Johnson – The SMSF Expert

2. LEGAL DEFINITION OF AN SMSF
Deed has pensions or corporations power
All trustees are members and vice versa
Can’t be employer of member unless related
Limited exceptions
Single member funds
Legal Personal Representative of member
6 month rule
Disqualified Persons

3. ACCOUNTING rULES Must be Audited Not a reporting entity
Assets at Market Value
Minutes & Resolutions kept for 10 years!!

4. Trustees’ covenants? To act honestly & diligently
Act in the best interests of beneficiaries
Conflict of Interest Situations
Investment Strategy, Insurance Strategy & Risk Management Strategy

5. Investment Strategy Includes:
Composition of investments incl. diversification
Liquidity having regard to cash flow
How reliable information is available
Ability to discharge liabilities when due
Tax consequences of strategy
Costs incurred in relation to implementing strategy

6. InSURANCE COVENANTS Formulate Insurance Strategy including:
Kinds of insurance offered
Level of cover offered
Basis of decision to offer insurance
Method used to determine insurance providers
Plus a Risk Management Strategy

7. Sole Purpose Test

8. No Financial Benefits To Members Or Related Parties
Cannot Lend to a Member or a Relative

9. Can’t acquire an asset from a member
Except
Listed Shares
Business Real Property
Certain in-house assets

10. No borrowing!! Except in limited circumstance
To pay a benefit
To Settle Securities
Or to borrow to buy an asset
Limited recourse loan
Asset held on trust
Single Acquirable Asset
Can borrow off members

11. IN HOUSE ASSETS LIMITED TO 5%
Definition
What happens if you breach?

12. QUESTIONS