SMSF trustees exposing themselves to compliance risks by using personal bank accounts
A recent article in SMSF Adviser has provided an overview of the issues some SMSF trustees are facing by exposing themselves to potential compliance risks by paying fund expenses from their personal bank accounts.
SMSF trustees should be aware that there are severe consequences should these payments not be rectified before the fund is audited. While some of these funds might be only small amounts when it comes to audit time, they usually reach a reasonable amount and as such, they need to be paid out of the fund rather than a personal bank account.
While it can often be an honest mistake, if the issue continues to occur then it can become a compliance issue for SMSF trustees.
Other issues for compliance include holding assets in an incorrect name where the trustee uses a corporate trustee but it is used for other entities. SMSF trustees and practitioners should, in this case, be making sure the asset is held in the name of the trustee of the super fund and also the fund is listed as a designated account on the assets.
At the end of the day, SMSF trustees should protect themselves from potential compliance risks by ensuring all fund expenses are paid from the correct account and should an error occur this is rectified swiftly and without delay. Ideally setting up two separate accounts with two banks will ensure there is no room for confusion.
See original article here.