Being a trustee of a Self-Managed Super Fund (SMSF) comes with significant responsibilities. Trustees must adhere to superannuation laws, governing rules, and fiduciary duties under trust law.

What Are Trustee Duties?

 

• • Accepting member contributions and rollovers
  • Formulating and reviewing the investment strategy
  • Making fund investments
  • Handling administrative tasks (like collecting rent or managing properties)
  • Recording trustee decisions
  • Maintaining financial records
  • Preparing annual statements

If trustees choose to manage these responsibilities themselves, they cannot charge a fee to the SMSF.  Super laws explicitly prohibit trustees from receiving any remuneration for their duties.

Navigating the grey areas

 

It can be tricky to determine if a trustee is acting in their capacity as a trustee or in another role. The ATO suggests that using business tools or performing licensed activities might indicate non-trustee capacity. For example, if a plumber renovates a property owned by their SMSF using their tools, it raises questions about whether they’re acting as a trustee.

Trustees often seek private binding rulings from the ATO for clarity on these situations, as confusion can lead to significant tax implications.

Why this matters

 

Trustees face a dilemma: if they’re not acting in their trustee capacity, they might need to charge market rates for their services, potentially incurring a hefty tax bill. However, the super law doesn’t allow them to charge unless they offer similar services to the public.

This situation exemplifies the challenges SMSF trustees face, as they navigate the complex intersection of tax and super laws.

 

How we can help:

Being a trustee of an SMSF carries important responsibilities and restrictions. If you are unsure about your role or compliance, don’t hesitate to get in touch. Our team is here to help you stay on track and safeguard this important asset.

You can find out more about working with Marsh & Partners here. As your Absolute.Account.Ability partner we’re on a mission to make your business life better. We’ll help you set goals for your business, devise an Action Plan to make them happen and meet with you regularly to ensure you stay on track.