SMSF auditors and trustees should not focus on timeframes in regards to the retention of a declaration to the ATO, but whether that document is still pertinent to the fund and its activities, an audit practitioner has pointed out.
Assurify managing director David Burrows said the ATO had raised the issue of trustee declarations in recent reviews of SMSF auditors, and practitioners and their clients had focused on the timeframe for keeping that document.
“The legislation says something along the lines of retain it for 10 years or however long is relevant,” Burrows said during a recent online presentation by The Auditors Institute, of which he is a director.
“A lot of people think about that 10 years, but the ATO states if you are still a trustee, that is still relevant. That is why the requirement to keep that document extends from as soon as the requirement came in on 1 July 2007.
“You could have a trustee declaration signed on that date that is still relevant today and for the past 18 years the trustees needed to keep this documentation, and we’re seeing a lot of SMSF trustees fall over at this point.”
Auditors Institute ambassador Graeme Colley added while the requirement to hold a signed trustee declaration applied to any trustee appointed since 1 July 2007, that also included people who had changed their trustee status.
“For any ‘new’ trustee, for example, if they change from an individual trustee to a corporate trustee, then you’ll need a new declaration because they’ve been appointed as a trustee subsequent to 1 July 2007 in those circumstances,” Colley said.
“Vice versa, if you go from a corporate trustee to an individual trustee, and I don’t know why you want to do that, if that’s happened after 1 July 2007, then they also need a signed declaration.”
He also clarified while it was an annual requirement for auditors to check the declaration was retained, it was unnecessary to sign a new one every year.
“If you have already got a copy from last year or a few years ago and it’s with the records of that fund, there’s no necessity to get a new trustee declaration signed every year in that case,” he stated.
“If those documents were signed some years ago but are lost, the ATO is now saying you, as an auditor, need to establish you have a signed copy of the declaration and that forms part of the audit, and if you don’t have one that’s signed, then get one signed by the trustees.”
