The superannuation environment has changed significantly over the last 3-5 years and to ensure your deeds are compliant with the current legislation, it is sensible for you to consider updating your SMSF deeds to help ensure the SMSF remains compliant.
Risks with an old deed:
It can be dangerous for an SMSF to have an old deed with irrelevant and invalid clauses. They increase the risk that you might exercise a power that the law no longer allows — for example, to set up a new pension income stream, could be in breach of current superannuation law and cause your SMSF to lose its tax advantage status.
Furthermore, the likelihood of the ATO auditing your SMSF and reviewing the deed has increased as the agency is cracking down due to the governments allocation of an extra $100 million for SMSF auditing.
Your SMSF’s deed may not include the changes summarised below. Some of those changes reflect developments in best practice. Others reflect changes in the law.
The changes are:
- 7 July 2010 changes to SMSF borrowing law — changes include “instalment warrant borrowing” is now known as “limited recourse borrowing”
In July 2010, a number of changes were made to the law about SMSF borrowing. The deed now reflects these changes.
- 4 May 2009 Deed allows Death Benefit Agreements
Members can now use binding Death Benefit Agreements that do not lapse after three years the agreements bind the trustees until the member revokes or changes the Agreement.
- 31 January 2008 SMSFs borrowing to acquire assets
Deed now specifically mentions SMSF limited recourse borrowing as allowed by law – again, this will help trustees who apply for a loan to acquire assets for their SMSF.
- 21 September 2007 “Better Super” major changes
“Better Super” changes for the major legal reform of SMSFs implemented on 1 July 2007 and 20 September 2007.
- 18 October 2006 Obsolete pensions removed
Specific pension payment clauses removed as the pension types are now obsolete.
It is prudent for you to consider the implications of these changes for the benefit of the SMSF’s trustee(s) and member(s).
We are currently arranging deed updates form many of our clients’ SMSF’s and offering a low flat-rate fee of $275.00 inclusive of GST.
To update a SMSF’s deed is simple and takes only 3 steps:
- Confirm that you need your SMSF deed updated
- Complete our application form and return it via email, fax or mail.
- We will complete and send you a Deed of Variation to the SMSF’s deed, a set of Minutes approving the update, a Notice to Members, and the new terms of the SMSF’s deed.
The process is simple and effective.
If you have any questions or would like us to arrange for the update of your SMSF deed, please contact us on 1300 722 796 or via email email@example.com.