Image Soruce:  flickr/Guudmorning!

Image Soruce: flickr/Guudmorning!

Q. Two weeks ago you mentioned potential fines for failing to keep trustee minutes for ten years. While I have definitely retained minutes of decisions such as the change from personal to corporate trustee and the commencement of member’s pension, I have never been sure whether a trustee minute is even required for the decision to buy and/or sell shares on the ASX. This would require a lot of minutes for a reasonably active SMSF. Can you please clarify.

A.  A Trustee of a SMSF is required to keep proper and accurate records.  According to the ATO, you are obligated to take minutes for all investment decisions including why a particular investment was chosen and whether all trustees agreed with the decision.  This is to protect you as a Trustee in the event of an investment failing and action being taken against you by the other Trustees for failing to properly execute your duties.
You need to keep the following records for a minimum of five years:

  • Accounting records that explain the transactions and financial position of your SMSF
  • An annual operating statement and an annual statement of your SMSF’s financial position
  • All SMSF annual returns lodged
  • Copies of any other statements you are required to lodge with the ATO or provide to other super funds.

You need to keep the following records for a minimum of 10 years:

  • Minutes of trustee meetings and decisions (if matters affecting your fund were discussed, for example, you reviewed the fund’s investment strategy)
  • Records of all changes of trustees
  • Trustee declarations recognising the obligations and responsibilities for any trustee, or director of a corporate trustee, appointed after 30 June 2007
  • Members’ written consent to be appointed as trustees
  • Copies of all reports given to members
  • Documented decisions about storage of collectables and personal-use assets.

Whilst the ATO guidance appears a bit over the top, in the absence of further guidance you would be wise to follow the suggested guidelines and minute all investment transactions.


Follow Andrew on Twitter @AndrewHeavenFP.  This article was originally published in The Australian.