ATO Trustee Declaration

By January 23, 2016 Auditing No Comments

Superannuation became mandatory about 2005 for all Trustees or Directors of Trustee Companies to complete the declaration and hold for 10 years. Education is provided in Trustees responsibilities free of charge by the ATO, and the accounting bodies have put together an ATO approved course free.
It covers:

  • Who should complete the declaration
  • Information you need to read
  • Reading and understanding before signing
  • Signing and witnessing the declaration
  • What to do with the completed declaration
  • Understanding the responsibilities of being a trustee
  • Understanding the meaning of Sole Purpose
  • Understanding the duties
  • Accepting contributions
  • Restrictions on investments
  • Understanding the requirements for administering the fund

The next sections explain the main components of the Declaration and legislation.


In an audit report there are about 30 listed sections and regulations that form the basis of the compliance report. The actual SIS Act has approximately 500 sections.

This appendix is included to assist with the meaning of the legislation and regulations listed above

Section or Regulation
The fund must meet the definition of an SMSF
The trustees must keep and maintain accounting records for a minimum of five years
The trustees must prepare and maintain proper accounting records
The trustees must provide the auditor with the necessary documents to complete the audit in a timely and professional manner; and within 14 days of a written request from the auditor
S52(2)(d) or
Reg 4.09A
The assets of the SMSF must be held separately from any assets held by the trustee personally or by a standard employer sponsor or an associate of the standard employer sponsor
S52 (2)(e)
The trustee must not enter into a contract that would prevent/hinder them from exercising the powers of a trustee
The fund must be maintained for the sole purpose of providing benefits to any or all of the following:

  • fund members upon their retirement
  • fund members upon reaching a prescribed age
  • the dependants of a fund member in the case of the member’s death before retirement
The trustees must not loan monies or provide financial assistance to any member or relative at any time during the financial year
The trustees must not acquire any assets (not listed as an exemption) from any member or related party of the fund
The trustees of the fund must not borrow any money or maintain an existing borrowing (not listed as an exemption)
Limited-recourse borrowing arrangements
Outline of the in-house asset rules that trustees must follow (these relate to transactions of any kind with a related party of the fund)
Outline of the manner in which in-house assets must be valued by trustees (arms-length market value)
The trustees must comply with the in-house asset rules
The trustees must keep minutes of all meetings and retain the minutes for a minimum of 10 years
Trustees who became a trustee on or after 1 July 2007 must sign and retain a trustee declaration
All investment transactions must be made and maintained at arms- length – that is, purchase, sale price and income from an asset reflects a true market value/rate of return
A disqualified person cannot be a trustee, investment manager or custodian of a superannuation fund
Sub Reg 1.06 (9A)
Pension payments must be made at least annually, and must be at least the amount calculated under clause 2 of Schedule 7
Reg 4.09
Trustees must formulate, regularly review and give effect to an investment strategy for the fund
Reg 5.03
Investment returns must be allocated to members in a manner that is fair and reasonable
Reg 5.08
Member benefits must be maintained in the fund until transferred, rolled over, allotted (to the member’s spouse) or cashed in a permitted fashion
Reg 6.17
Payments of member benefits must be made in accordance with Part 6 or Part 7A of the regulations and be permitted by the trust deed
Reg 7.04
Contributions can only be accepted in accordance with the applicable rules for the year being audited
Reg 8.02B
When preparing accounts and statements required by subsection 35B(1) of the Act, an asset must be valued at its market value
Reg 13.12
Trustees must not recognise an assignment of a super interest of a member or beneficiary
Reg 13.13
Trustees must not recognise a charge over or in relation to a member’s benefits
Reg 13.14
Trustees must not give a charge over, or in relation to, an asset of the fund
Reg 13.18AA
Investments in collectables and personal use assets must be maintained in accordance with prescribed rules