Do my SMSF loans have to be audited?

There’s a lot of confusion surrounding the rules and regulations regarding self-managed super funds (SMSF).

The Australian Taxation Office (ATO) states that SMSFs must have their accounts, statements and compliance audited on an annual basis. Fund trustees are in charge of appointing an auditor and providing them with all the documentation they need to perform their job.

SMSF auditors must register with the Australian Securities and Investments Commission (ASIC), which keeps a tally of suspended and disqualified auditors.

ASIC can provide you with an auditor’s name, SMSF auditor number, registration status, registration date, current business address and other important details.

The audit process is all encompassing, and your SMSF loans are only a small part of the factors that will be analysed.
However, keep in mind there are plenty of  rules regarding SMSF loans.

For instance, any property purchased through your SMSF must be from an unrelated party, and any property investment must be in keeping with your SMSF investment strategy. While the regulations surrounding SMSFs are significant, the benefits can be considerable, as well.

As an example, your SMSF can acquire property worth more than its available funds through gearing. Additionally, your SMSF assets are secure with limited recourse borrowing, as your lender does not have the chance to obtain other assets held in the fund in the case of default.

SMSF loans can be used for both residential and commercial property purchases, and your fund will receive all income and capital growth even if the property has not been paid off. In fact, your fund can use income from the property to help pay off the loan.

If you want to know more about SMSF loans, contact the experts at Redrock.