Any decisions made to change your investment strategy must be noted via a minutes of meeting, and relevant amendments made to the fund’s investments.

The legislation also requires trustees to:

-Consider insurance for the fund members;

-Value assets at market value; and,

-Keep all money and assets of the fund separate from any assets they (or the corporate trustee) hold personally.

The regular investment strategy review should be straightforward for those using a financial planner. When the trustees sign off on a recommendation to rebalance a SMSF investment portfolio to its target asset allocation, this would be evidence of a review.

While many members of SMSFs may not feel they need Life or Total Disability insurance, it is now the responsibility of SMSF trustees to give consideration to this matter.  Such consideration and decision should be evidenced by a minutes of meeting.

The last point may seem obvious, but is particularly pertinent  when we consider the issue of real property.  If two individual trustees of a SMSF purchase an investment property using their SMSF, it is the names of the two individuals that appear on the title…with no mention of the SMSF.  It such cases it can be useful to execute a “Declaration of Trust” stating the asset is in fact held on behalf of the SMSF members by the trustees.  You should seek legal advice to execute such a document.

Trustees may find the requirement to value super fund assets at market value is somewhat onerous, particularly when considering assets that are not listed on a stock exchange.  The Australian Tax Office (ATO) has published guidelines to assist trustees in this matter.  Essentially the ATO will accept the valuation provided by trustees if it is in line with the guidance provided.  The valuation must also have evidence that supports the value used, and it must be based on objective and supportable information.

Trustees must value assets at market value each year for financial reporting purposes.  Other times that require market valuation of assets are set out in the ATO guidance, and include when transactions occur between the fund and related parties, and when an income stream is commenced or a lump sum benefit is paid.

There are times when the trustees must use a qualified valuer, but at other times a market valuation by a person who has specific experience or knowledge in a particular area is sufficient – for example, in the case of real estate an agent’s valuation would suffice.

Overall, trustees must maintain records of valuations, and if in doubt always seek advice.

If you are interested in the guidance provided by the ATO, you can find it at: ATO_Valuation_Guidance , or speak to your financial planner.