In this year’s budget, the federal government proposed ditching the annual requirement for an SMSF to be audited to a three-year model.
Treasury released the proposed framework for the model today, and among the more contentious suggestions is a move to trustees determining their eligibility for a three-year audit as opposed to yearly.
Trustees will have to base their decisions on some eligibility requirements, including whether their record keeping and compliance is satisfactory, or if the fund has had key events worthy of audit.
Treasury is also exploring splitting the SMSF sector into thirds during a transitional period, and having a staged phase-in approach to the new model.
The framework, released in the form of a discussion paper, has only been public since this morning, but already SMSF professionals are questioning how the measures will work in practical terms.
Michael Lorimer, who leads the advocacy group Self-managed Independent Superannuation Funds Association, said “at first glance” the rollout of staged introductions and self-assessment appear complex and require further attention to detail.
However, he stressed the association is pleased the government has listened to feedback from industry about the breadth of the measures’ impact.
For example, the eligibility criteria for a three-year audit as opposed to a one-year audit cycle is considerably narrower than originally thought, as popular triggers such as the commencement of a pension or loan would automatically mean a fund requires an annual audit.