Compliance, Strategy

Regular reporting not only about compliance

SMSF reporting compliance

Regular SMSF reporting should be acknowledged for the strategic benefits it brings and not be seen as just a compliance requirement.

The adoption of more frequent SMSF reporting should be assessed by advisers and trustees from a strategic perspective and not as a standard that will require adoption purely for compliance reasons, a technical manager has said.

“Regular reporting really does help strategic advice and strategic planning. [That is with regard to] things like the contributions caps,” SuperConcepts SMSF technical support executive manager Nicholas Ali said during a webinar his firm hosted today.

“We now have contribution [rules allowing] people who are 66 [years of age] on 1 July [2021] turning 67 to use the [non-concessional contribution] bring-forward provisions. That’s a really, really good strategy, but that’s all predicated on your total super balance as at 30 June prior.”

More frequent reporting will allow SMSF advisers and trustees to have a more accurate understanding of a member’s total super balance and hence their ability to qualify for use of this measure, he noted.

According to Ali, pension payments are another strategic area where regular reporting can make a significant difference.

Specifically, the practice will provide more accurate record-keeping for situations where an SMSF has multiple pensions, one being taxable for the purpose of reverting to the member’s spouse upon the current pension recipient’s death to facilitate the most tax-effective approach, he said.

“By having regular reporting we really do ensure that we don’t befuddle the strategy we’ve put in place,” he noted.

He pointed out reporting more often will also allow trustees to know their position regarding the minimum pension payment requirement at any point in time during the financial year.

“So yes there’s that regulatory push, but I think, more importantly for me, it’s got the ability for trustees of funds and for their planners and their accountants to really, really optimise strategies in a timely fashion,” he noted.

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