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Are SMSF audits too expensive?

Self-managed super funds: A statistical overview 2009-10

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Table 21: 2010 SMSF audit fees

This table illustrates average and median SMSF audit fees reported on the 2010 SMSF annual return. It also distinguishes SMSFs whose auditors performed additional services for the fund and those who only performed the audit service.

These figures are estimated based on SMSF income tax and regulatory return form data.

Auditor provided other services

Average audit fee

Median audit fee

Yes

$882

$550

No

$571

$468

Total

$607

$490

Note: The data for this table excludes those SMSFs that did not report an audit fee >$0 in their 2010 Annual Return.

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SMSF AUDIT FEE EXPENSIVE SMSF AUDIT MELBOURNE SMSF AUDIT SYDNEY SMSF AUDIT AUSTRALIA SELF MANAGED SUPER FUNDS AUDIT

Self-managed super funds: A statistical overview 2009-10

 Increase text size  Decrease text size

Table 21: 2010 SMSF audit fees

This table illustrates average and median SMSF audit fees reported on the 2010 SMSF annual return. It also distinguishes SMSFs whose auditors performed additional services for the fund and those who only performed the audit service.

These figures are estimated based on SMSF income tax and regulatory return form data.

Auditor provided other services

Average audit fee

Median audit fee

Yes

$882

$550

No

$571

$468

Total

$607

$490

Note: The data for this table excludes those SMSFs that did not report an audit fee >$0 in their 2010 Annual Return.

Follow ATO link here

SMSF AUDIT FEE EXPENSIVE SMSF AUDIT MELBOURNE SMSF AUDIT SYDNEY SMSF AUDIT AUSTRALIA SELF MANAGED SUPER FUNDS AUDIT

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SMSF Insurance considerations, Market Valuation and keep assets separate

Superannuation Industry (Supervision) Amendment Regulation 2012 (No. 2)
– F2012L01654
Key updates:
1. SMSFs to consider insurance for members as part of the fund’s investment strategy,
2. Keep money and other assets of an SMSF separate from those held by a trustee personally and by a standard employer-sponsor or an associate of a standard employer-sponsor and
3. Require SMSF assets to be valued at market value for reporting purposes
SLI 2012 No. 183 Regulations as made
This regulation amends the Superannuation Industry (Supervision) Regulations 1994 to require trustees of self managed superannuation funds (SMSFs) to consider insurance for members as part of the fund’s investment strategy, keep money and other assets of an SMSF separate from those held by a trustee personally and by a standard employer-sponsor or an associate of a standard employer-sponsor and require SMSF assets to be valued at market value for reporting purposes.
To ream more click here

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SMSF Limited recourse borrowing arrangements

Limited recourse borrowing arrangements – related party loans

Issues raised

 

If a related party lender offers a discounted rate of interest to an SMSF under a section 67A borrowing arrangement, would the discount be considered a contribution received by the SMSF?

Can an SMSF enter into a borrowing arrangement under section 67A of the Superannuation Industry (Supervision) Act 1993 (SISA) with a related party if a zero rate of interest is charged by the related party lender and only principal repayments, with no imputed interest, are made throughout the loan term in accordance with the loan agreement?

Background information provided by member

Section 67A of the SISA does not prohibit an SMSF from entering into a borrowing arrangement with a related party lender. ATO ID 2010/162 states that an SMSF trustee does not contravene section 109 of the SISA if it borrows money from a related party of the SMSF under a limited recourse borrowing arrangement (LRBA) on terms more favourable to the SMSF.

In the example used in ATO ID 2010/162, the interest rate imposed under the LRBA is lower than the rate that would be available to the SMSF from an arm’s length lender for an otherwise similar loan.

In this example, the ATO concluded that the borrowing entered into by the SMSF trustee entails no contravention of paragraph 109(1)(b) of the SISA because the terms and conditions of the borrowing are not more favourable to the other party than would be reasonably expected if the parties were dealing with each other at arm’s length.

Similarly subsection 109(1A) of the SISA applies to dealings with parties that are not at arm’s length, during the term of the investment. Subsection 109(1A) of the SISA applies after an investment to which paragraph 109(1)(b) applies has commenced and is interpreted in that context. As a result provided the dealing is not more favourable to the other party than would be expected had the parties been at arms length then the provision will not be contravened.

However, it is not clear in ATO ID 2010/162, whether the discount offered in the example, would constitute a contribution received by the fund.

To read more click here for ATO link

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SMSF Excess contributions tax –

 

ATO released updated guidelines for the Excess contributions tax penalties.

Guidelines are very helpful for trustees and Super administration firms which provides lots of clarity and puts the onus on having right processes in place once excess contribution event is identified.

Practice Statement Law Administration

PS LA 2011/24

 

SUBJECT:    Excess contributions tax – release authority – remission of   certain administrative penalties where an individual or superannuation provider does not comply with obligations in relation to a release  authority

PURPOSE:   To provide guidelines for the remission of administrative penalties regarding excess contributions tax where:·

–  an individual does not provide a release authority to a superannuation provider within the specified time

– an individual gives a release authority and the total amount released in accordance with the release authority exceeds the amount required to be released, or

– a superannuation provider does not release the required amount within the specified time.

To read more at ATO website click on the following link:

http://law.ato.gov.au/atolaw/view.htm?docid=PSR/PS201124/NAT/ATO/00001&PiT=20120507000001

 

 

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A snapshot of the superannuation borrowing landscape

Super borrowing is arguably the fastest-growing area of financial advice, and a potentially lucrative one for self-managed superannuation fund (SMSF) advisers.

Anecdotally, there is increased client demand in the area, and more and more products and services are finding their way to the market.

However, as a field of advice, super borrowing is not without its challenges.

Firstly, assessing and providing the strategic advice associated with a potential recommendation for a super borrowing scheme presents some interesting conundrums: should a client be borrowing to invest in the first place, and if so, is it more effective to do so inside or outside super?

Read More here at http://www.moneymanagement.com.au

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SMSF specialists getting due recognition

Linked to increasing trustee sophistication

By Darin Tyson-Chan and Samantha Hodge
Wed 25 Jul 2012

Practitioners considered experts in the field are the favoured basis for SMSF advice, a new survey has shown.

Individuals seeking advice on their self-managed superannuation funds (SMSF) are preferring to use the services of a professional who is an expert in the field, new industry research has revealed.

The finding is a result of “The SMSF Generations Report” compiled by Macquarie Bank and the SMSF Professionals’ Association of Australia.

“When we asked people about who they want to get advice from it wasn’t necessarily an adviser or an accountant, for many people it was a professional who is an expert in the field,” Macquarie Banking and Financial Services Group analytics research manager Gary Lembit said.

When conducting the research, respondents were also given the choice between the terms financial adviser and accountant as their preferred advisory sources, Lembit said.

He said the response reflected a shift in priorities among SMSF trustees. To ream more click here.

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SMSF Auditor Registration

 

On 23 June 2012 the Australian Government announced the details of the self managed superannuation funds (SMSF)  auditor registration requirements.

From 31 January 2013, auditors of SMSFs will be able to apply for registration with the Australian Securities and Investments Commission (ASIC). All auditors must then be registered with ASIC by 1 July 2013 to continue auditing SMSFs after this time.

Auditors will be subject to a $100 registration fee and a $50 fee when submitting their annual statement to confirm details of their registration.

For more information visit Treasury website here

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Guide to self-managed superannuation funds

Setting up an SMSF

When you set up an SMSF you become a trustee (or the director of a company that is a trustee).

What it means to be a trustee

A trustee is responsible for running the fund and acting in the best interests of the members. As a trustee you need to manage the fund and its investments separately from your own affairs.

How your SMSF is regulated

We administer the relevant super laws for SMSFs, work with you to help you meet your obligations and verify compliance, but we don’t provide financial or investment advice.

Laws, rules and consequences

You’re also responsible for running the fund according to its trust deed and the super laws. If you don’t, the tax concessions that normally apply to your super may be affected and you may face penalties. Your fund must be run for the sole purpose of providing retirement benefits for the members.

Steps to setting up an SMSF

Your SMSF needs to be set up correctly so that it’s eligible for tax concessions, can pay benefits and is as easy as possible to administer. Here are the steps to setting up your fund:

  1. Appoint an SMSF professional to help you set up and run your fund
  2. Work out the structure of your fund
  3. Make sure you (and the other members) are eligible to be a trustee
  4. Check the residency of your fund
  5. Create your trust and trust deed
  6. Appoint your trustees
  7. Record each member’s tax file number
  8. Open a bank account for your fund
  9. Register with the ATO
  10. Prepare an investment strategy.

To read more click here

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Contact Us

Toll-Free: 1300 661 069
Phone: 03 9098 8658
Fax: 03 9746 6330

Melbourne
Level 40 140 William Street
Melbourne, VIC 3000

Postal Address:
PO Box 2050
Melton South VIC 3338

SMSF AUDIT
CPA-Public-Practice

SPAA Specialist Auditor

SPAA Specialist Auditor

Shiv Parihar is a SMSFA accredited SMSF Specialist Auditor™. He provides SMSF auditing services independently, conflict free and in accordance with professional audit standards.

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