Small businesses have been warned to stay on top of their self-managed super funds, and check with their managers everything is up to scratch ahead of a raft of legal changes coming this year.
The SMSF Professionals’ Association of Australia (SPAA) says SMSF owners need to be on top of the new changes, which will affect who can and can’t manage their funds.
New auditing requirements, regulations on transfers made out of the country and new penalties are just a few of the changes businesses need to be aware of.
SPAA head of education and professional standards director Graeme Colley told SmartCompany this morning the changes are part of a suite which will make 2013 an important year for SMSF operators.
“Entrepreneurs especially need to check their auditor is registered under the new system,” he says.
These licensing changes will be the first big shift of 2013. This means specialist advisors – including those who maintain and operate SMSFs – will need to be registered as of July 1. Registration begins after January 30.
If administrators decide they want to keep managing SMSFs, they need to have their applications in by April. There are some requirements for this, such as auditing at least 20 funds and meeting some educational requirements.
“It’s quite comprehensive,” says Colley. Accountants who provide advice for SMSFs also need new approval, in the form of a limited licence which takes effect from July 1.
Colley says the limited licence provides an avenue for accountants who want to work on SMSFs without having to get a full licence. However, he says everyone needs to be up to speed.
Financial planners who also provide tax advice will need to be licensed under the new structure.
“As part of this change, financial planners who provide tax advice will need to meet education and experience requirements; satisfy a fitness and propriety test; and follow an approved code of conduct,” he says.
The second big change is the legislation related to off-market transfers. The legislation to this change doesn’t actually exist, after the federal government delaying the introduction of the laws until July of this year.
“What will happen after the first of July – if the proposal comes about – is that if you want to transfer investments on the share market, for example, then it will be more expensive because you’ll need to get valuations.”
“Those things are complicated for people who want to put investments into their superannuation funds.”
The third major change is that SMSF owners will now need to consider insurance as part of the investment strategy, “and it’s not as simple as it sounds”, warns Colley.
“You’ll need to do some analysis of your insurance requirements and then decide whether it’s appropriate to do so.”
There are more changes coming, such as mandatory trustee education and the introduction of new administrative penalties.
Colley says SMSF operators don’t need to worry about the details of these changes, but says they should be speaking with their auditors and accountants to find out what their plans are. If an accountant isn’t considering getting registered, then it may be time to find someone who is, he says.
“They just need to check their auditor is registered under the new system.”