Keeping Money and Other Assets Separate – SMSF

An SMSF must open and maintain its own bank account, as it is required to keep its assets and money separate from that of other entities.

The trustees of the SMSF are members of a family.
The fund has a standard employer-sponsor and all the trustees work for the standard employer-sponsor in various capacities.
There are several unit trusts owned and operated by the SMSF and/or the trustees.
The trustees have stated that, for administrative simplicity and cost savings, unit trusts jointly owned by the SMSF and trustees as well as unit trusts owned solely by the SMSF all operate using the one bank account, held in the name of the SMSF.

Regulation 4.09A of the SIS Regulations states that a trustee of an SMSF must keep the money and other assets of the fund separate from any money and assets respectively:
• that are held by the trustee personally; or
• that are money or assets of a standard employer-sponsor,
or an associate of a standard employer-sponsor, of the fund.

The unit trusts are ‘associates’ of the standard employer-sponsor of the fund in accordance with S.12 of the SIS Act.

Keeping all of the unit trust’s money in the SMSF’s bank account, including those trusts jointly owned by the SMSF, is not in line with the requirements of regulation 4.09A and therefore constitutes a contravention.


Comments are closed.


Liability limited by a scheme approved under Professional Standards Legislation.

The information contained in this site is general and is not intended to serve as advice. No warranty is given in relation to the accuracy or reliability of any information. Users should not act or fail to act on the basis of information contained herein.

© MJC & Co. Accountants.