The ATO and the SMSF Sole Purpose Test
The ATO recently have issued short informative videos on YouTube covering topics relating to self managed super funds.
Trustees of SMSFs need to adhere to many trustee obligations and rules as per the SIS (Superannuation Industry Supervision) Regulations and one of the things that is often overlooked is whether investments meet the sole purpose test. You may hear friends or associates comment on setting up an SMSF for the purpose of investing in a particular investment. It may sound good, but have they stopped to consider whether it meets the sole purpose test?
The Sole Purpose Test determines whether your SMSF is maintained for the sole purpose of providing retirement benefits to the members (or to dependents in the event of a member passing away). Basically if a member or related party gains a benefit from an investment of the Fund it could mean that your Fund is not meeting the Sole Purpose Test.