SMSF - Earnings for tax and accounting

I have recently set up an SMSF and just getting my head a round the accounting. I work in a large pty ltd company as an accountant but don't have experience of super funds.

I am confused by the member's earnings reported on the tax return. I can see the tax office will want to see under income, the earnings for tax purposes i.e. capital gains (with 33 1/3% discount applied), dividend income, interest, etc. And then these allocated to members accounts.

For accounting purposes earnings of the fund would show unearned income i.e. from adjusting shares held to market value at year end. I am presuming these wouldn't be shown on the tax return but will need to be reported to Members on their statements.

Is this correct or am I missing something?

 

Hi Ed

You are correct.

You need to take up the revaluations on the investments etc as income on your financial statements (increase / decrease in market value) which then will flow through to your members statements - however you do not need to show any unrealised income / gains on the SMSF tax return.

What software are you using to prepare your SMSF accounts?

I would not advise using a generic MYOB or QuickBooks program as you will need to manually prepare many other supporting schedules / reports etc.

BGL Simple Fund is probably the easiest for the majority of SMSFs and will make it a lot easier for the audit of the fund. As you are an accountant yourself you will find it a breeze.

Let me know if you need further information - but you are on the right track.

Good luck!
SM

 

Ed,

Yes you will need to report this. Whilst some accountants charge large accounting fees for SMSF accounts - you should consider this to ensure a complying superfund. A non-complying super fund will be charged at the highest marginal rate.. So please ensure you do factor this correctly.

As an adviser, we structure our clients in SMSF and have built an accounting arm as a result. $1,100 accounting fee (inc Audit) is extremely well priced in the industry.

Our website is JPM Investment Group Pty Ltd | Innovative Financial Planning and Insurance
email - [email protected]

We services clients across Australia and are interstate regularly.

Good luck with the returns and if you need assistance, please do not hesitate to send me an email or contact my direct line (03) 8581 1056.

Kind Regards

James Merchan
BBus (Finance), Dip FS
Director & Financial Advisor
JPM Investment Group [339151]

 

Thanks Superman for your clear answer. I don't envisage having many transactions and my fund is fairly small so the focus at the moment is reduced costs therefore I intend using excel for the first year at least. Having said that the Simple Super package looks really good and I will bear that in mind. Thanks again.

 

Free SMSF Accounting Platform - Mclowd

Hi Guys

You may want to have a look at Mclowd, a free SMSF accounting platform: Free SMSF Accounting | SMSF | Australia | Self Managed Super Fund

Any questions don't hesitate to contact us.

Cheers

Ashley