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Rules & duties of SMSF trustees

Running an SMSF means taking control of your retirement - but it also means taking on legal responsibilities. Learn what rules and duties, you should be aware of for your SMSF.

Running a Self-Managed Super Fund (SMSF) gives you control over how your retirement savings are invested. But with that control comes responsibility. As a trustee, you’re legally accountable for ensuring your fund complies with ATO requirements and laws such as superannuation.  

Here are some things you should be aware of.

Trustee responsibilities

Whether you're an individual trustee or part of a corporate structure, your responsibilities include:

  • Complying with your trust deed and the Superannuation Industry (Supervision) Act 1993 (SIS Act)
  • Managing investments in line with your documented investment strategy
  • Keeping accurate records of financial transactions and member balances
  • Processing contributions and benefit payments correctly
  • Notifying the ATO of any changes to fund details (e.g. address, members, trustees)
  • Ensuring the fund remains compliant with residency rules and contribution caps

Breaches can result in penalties, disqualification, or loss of tax concessions.

Preparing for tax time

Tax time is a critical moment for SMSF trustees. Self-Managed Super Funds, are generally required to lodge an SMSF Annual Return (SAR) with the ATO each year.  

Learn how

Investment strategy: Review and adapt annually

Your SMSF should have a written investment strategy that reflects the retirement goals and risk profiles of its members. This strategy should:

  • Be tailored to each member’s needs
  • Consider each members risk tolerance, investment diversification, liquidity, and insurance
  • Be reviewed annually
  • Be updated when members join, leave or retire

A well-documented strategy helps demonstrate compliance and supports sound decision-making.

Record keeping: What to keep and for how long

Trustees must maintain comprehensive records to support the fund’s operations and compliance. This includes:

  • Financial statements and member reports
  • Trustee declarations and meeting minutes
  • Records of contributions, rollovers, and benefit payments
  • Documentation of any changes to the fund

Most records must be kept for at least five years, while some (like trustee declarations) must be retained for ten years.

Event-based reporting: What to report and when

Certain events must be reported to the ATO within specific timeframes. These include:

  • Changes to fund structure or trustees
  • Commencement of pensions
  • Member contributions exceeding caps
  • Fund wind-ups or rollovers

Trustees should refer to the ATO’s SMSF event-based reporting guidelines to ensure timely lodgement.

Annual return and audit: Staying compliant with the ATO

Each financial year, your SMSF must:

  • Lodge an SMSF Annual Return (SAR) with the ATO
  • Report income tax, member contributions, and regulatory details
  • Pay the SMSF supervisory levy
  • Engage an independent auditor to review the fund’s financials and compliance
     

Late lodgement can result in:

  • Loss of tax concessions
  • Fund status changes that block rollovers and employer contributions
  • Potential trustee disqualification

Consequences of non-compliance

Failing to meet your obligations can have serious consequences. Actions that ATO may take includes:

  • Issue administrative penalties
  • Disqualify trustees
  • Freeze fund assets
  • Remove concessional tax treatment

Trustees should regularly review their compliance status and seek professional advice if unsure.

Being an SMSF trustee is a serious commitment - but with the right knowledge and systems in place, it’s manageable. Staying on top of your duties, keeping accurate records, and meeting reporting deadlines helps to ensure your fund remains compliant.

For more information, refer to the ATO for up-to-date SMSF information

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Distributed by Commonwealth Bank

Things you should know

This article is intended to provide general information of an educational nature only. The information may include general advice but does not take into account your individual objectives, financial situation, needs or tax circumstances, and so you should consider the appropriateness of the advice having regard to your circumstances before acting on it. Where applicable, you should obtain and read the relevant Product Disclosure Statement (PDS) and other important disclosure documents before making a decision about acquiring or continuing to a product. You should consider seeking independent professional financial, tax and/or legal advice before making any decision based on this information.

The above information is not tax advice. Taxation laws are complex and subject to change. Commonwealth Bank does not provide tax (financial) advice under the Tax Agent Services Act 2009 (Cth). You should consider seeking independent tax advice from a registered tax agent, accountant or adviser before you make any decisions based on this information.

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