Key takeaways
- Some SMSF records must be kept for five years, and others for ten years.
- Five-year records include accounts, financial statements and annual returns.
- Ten-year records include trustee minutes, the trustee declaration, and changes of trustee.
- Keeping records as you go, not at year end, makes the annual audit far easier.
An SMSF runs on evidence. The auditor and the ATO need to see that decisions were made properly and that the fund's money and assets are accounted for. Strong record keeping is not bureaucracy, it is what keeps the fund complying and the audit straightforward.
Records to keep for five years
- accurate accounting records that explain the fund's transactions and position;
- annual financial statements (operating statement and statement of financial position);
- the SMSF annual return and other ATO lodgements;
- records of contributions, rollovers and benefit payments.
Records to keep for ten years
- minutes of trustee meetings and decisions (for example, when you set or review the investment strategy);
- records of trustee or director changes and members' consents to act;
- each trustee's signed ATO trustee declaration;
- reports given to members.
Document your decisions
It is not enough to make the right decision, you need to be able to show you made it. Record significant decisions in minutes: adopting and reviewing the investment strategy, starting a pension, accepting an unusual contribution, or buying a major asset. A short, dated note at the time is worth far more than a reconstruction later.
Keep the fund separate
Records also prove the fund's assets are held separately from your own. Keep the fund's bank account, investment accounts and asset titles clearly in the fund's name, and never run personal transactions through them. The ATO's record-keeping guidance sets out the requirements.
Make it a habit
The trustees who find the annual audit painless are the ones who reconcile and file as they go. Capturing documents at the point of each transaction, rather than hunting for them in July, is the single best habit a trustee can build.
Frequently asked questions
- How long do I need to keep SMSF records?
- It depends on the record. Accounts, financial statements and annual returns must be kept for five years. Trustee minutes, the trustee declaration, trustee changes and member reports must be kept for ten years.
- Do I need minutes for SMSF decisions?
- For significant decisions, yes. Documenting decisions such as adopting the investment strategy or starting a pension in dated minutes shows the decision was made properly, which is what auditors look for.
- Can I keep SMSF records electronically?
- Yes, electronic records are fine provided they are accurate, complete and accessible for the required period. Many trustees use cloud administration software, but the responsibility to retain the records still sits with the trustees.
