While the matter of tax deductions for your super fund is one of the reasons clients employ us to help manage and account for their funds, we thought it useful to provide the following flyer to explain the rules in light of recent advertising targeting SMSF trustees.
If you have been tempted by recent advertising to attend a conference or seminar to help educate you about running your SMSF and enjoy a holiday at the same time you might find it helpful to understand what your fund is allowed to pay for before incurring the cost.
Any expense must be authorised by the trust deed. For an expense to be tax deductible it must be linked to the income earning activities of the fund, and not related to the fund’s tax exempt income such as its pension income.
If a super fund pays for or reimburses members for private expenses it risks breaching the sole purpose test – that the fund exists sole to provide retirement benefits for its members – or the rule prohibiting using the fund’s resources for private purposes.
Penalties include fines, disqualification of being able to act as a trustee or losing all the generous tax concessions available to a super fund.
If you would like to check before incurring an expense, please feel free to check with either Sandy He or Michael Rees-Evans on 02 9229 7044.
Important note: this information is of a general nature and has been prepared without taking account of anyone’s financial situation, objectives or needs. Before making any investment decisions based on the contents you should obtain professional advice.