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Self Managed Superannuation Fund Trust Deed
If a self managed superannuation fund (SMSF) complies with the SISA (Superannuation Industry (Supervision) Act 1993) standards, the fund is a complying superannuation fund and is taxed concessionally at a maximum rate of 15%.
To stay a complying superannuation fund the trustee must make sure that the fund operates within SISA standards and the Trust Deed is up to date.
Trust Deed - a legal document that lays down the rules within which a trust must operate and describes how benefits will accrue to the beneficiaries under the trust.
Generally a Trust Deed should contain these clauses:
- Establishment of the Fund,
- Structure and purpose of the Fund,
- Covenants of the Trustee,
- Interpretation including definitions,
- General provisions including rights of members, complaints and disputes, and the security of benefits,
- Membership of the Fund,
- Fund accounts including accounting for specific investment and valuation of the Fund,
- Fund records, audit requirements, disclosure and reporting requirements,
- Appointment, vacancy and removal of the Fund trustees,
- Trustee investment and management powers, including investment strategy,
- Limited liability and indemnity of trustees,
- Trustee remuneration,
- Appointment of actuary, auditor and managers,
- Contributions to the Fund, including when the Fund can accept the contributions,
- Transfers and rollovers,
- Forfeiture of benefits,
- Pension payments, pension accounts, pension payment conditions and commutation of pensions,
- Transfer in-specie,
- Payment of benefits,
- Payment of benefits on death, including Binding Death Benefit Beneficiary Nomination,
- Payment of taxes and levies,
- Participating employers, including termination of employer contributions,
- Amendment of the Trust Deed,
- Winding up the Fund.
The trustees of the superannuation funds are responsible for making sure that their Trust Deeds reflect the latest in legislation, but also the auditors of their funds share the same responsibility. Professional self managed superannuation service operators provide this service as a part of the annual administration process.
Here is a summary of the key legal changes incorporated in SuperEasy latest Trust Deed version:
- "Superannuation Contributions Splitting" (Allows members to split certain superannuation contributions with their Spouse and have them transferred into their spouse's superannuation account).
- "Transition to Retirement" allows Members to access their superannuation benefits once they reach their Preservation Age, in the form of a Non-Commutable Income Stream (Non-Commutable Income Stream is an income that cannot be converted into a lump sum payment).
N.B. Before you can update your Trust Deed you need to make sure that your Deed can be amended i.e. your Trust Deed contains a provision or a rule allowing variations/amendments.
To update your Trust Deed, you need to arrange with your service provider for relevant documents to be prepared and sent to you. After you execute the documents, keep them with the original Trust Deed. You will need to enclose the deed amendment with the rest of the documentation as a part of the annual administration and audit to your service provider.
Please Note: If you have replaced any of trustees/members of the fund, changed structure, addresses or name of the fund, you need to notify the Australian Taxation Office and also your service provider!
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