To be eligible to become a SMSF trustee, a person must be 18 years or older and generally:

1.    Not be under a legal disability;

2.    Not have been convicted of an offence involving dishonesty;

3.    Not have been subject to a civil penalty under the SIS Act;

4.    Not be insolvent under administration e.g. an undischarged bankrupt; and

5.    Not have been disqualified by a regulator.

 

The SIS Act states that a person must give consent in writing to be appointed as trustee or director of a trustee company.  In addition a declaration must be signed stating that they understand their duties as SMSF trustee within 21 days of becoming a trustee.

 

The responsibility of the SMSF ultimately lies with the trustees.  The trustee must execute their duties in accordance with the following:

1.    SMSF trust deed;

2.    The Superannuation Industry (Supervision) Act 1993;

3.    The Superannuation Industry (Supervision) Regulations 1994;

4.    Income Tax Administration Act 1997;

5.    Tax Administration Act 1953; and

6.    The Corporations Act 2001.

 

The responsibilities of a trustee, whether a company or an individual are many, including:

1.    Preparation and lodgement of a Self Managed Superannuation Fund Annual Return (Tax Return);

2.    Preparation of a set of financial statements for the SMSF;

3.    Having the annual financial statements audited;

4.    Maintaining the records of the SMSF for up to 10 years;

5.    Looking after the day to day running of the SMSF.  This includes managing the bank account and investments (usually done with the assistance of an advisor);

6.    Complying with investment requirements (including establishing and maintaining an investment strategy and minutes); and

7.    Compliance with the SIS Act when accepting contributions.

 

There are also numerous restrictions as prescribed by the SIS Act, including:

1.    Meeting the Sole Purpose Test (i.e. the SMSF needs to be maintained for the sole purpose of providing retirement benefits to its members, or to their dependants if a member dies before retirement);

2.    Not accessing the member's balance until a condition of release has been satisfied (i.e. retirement; attainment of age 65; permanent incapacity;   temporary incapacity; severe financial hardship; compassionate grounds; attaining preservation age; or a temporary resident leaving Australia); and

3.    Not lending money to members or relatives.

 

To assist in the operation of a fund, the trustees may engage an external service provider (e.g. an accountant) to perform functions on their behalf.