Transaction limit in SMSF

Hi, does anybody know if there is a transaction limit on shares in a SMSF?

I calculate that my fund will have around 500 buys and sells in total over this tax year (with an equal amount of currency conversions for these overseas shares).

The idea is to build something akin to a mutual fund with many small positions but the volatility keeps on throwing me out as the share prices reverse.

Still up 10% for the year so not bad.

Thanks

 

Depends on your SMSF administrator/accountant. I've seen transaction limits or transaction count based fees from both cheap admins and the pricey ones.

Why SMSF?

 

This is not in reference to fees more I believe in the SIS providing of carrying on a business, I can tell you the trade activity of our clients is significant currently....

The key is for the purpose of retirement, direct guidance from the ATO here Carrying on a business in an SMSF

Here is an article dealing with the topic The self-managed superannuation fund rules on running a business

Hope that helps

Cheers Ivan

 

Thanks for those links Ivan.

I'm concerned that my 500 share transactions this FY may have my auditor lodging an ACR with the ATO.

I'm 20 years away from retirement so all of these transactions can only be for a retirement benefit and so I would think would pass the 'sole purpose' test.

So it's not clear what the AFR means by this
"An example might be trustees of an SMSF who regularly trade listed securities to such an extent that they are carrying on a share-trading business"


Many Thanks

 

Redwood is on the issue. Another issue is what is traded. Currency, commodities etc may need a risk management statement too. Be Probably as must an investment as roulette..red v black

Speculation v investment is a audit problem.

And trades initiated by one member and not akin to a strategy and unanimous choice may be a problem. IWhen I audited I would ask the passive trustee some questions. If one member was a speculator and the other had no idea it would pose a investment strategy concern. It's punting not investing. And not unanimous

Many auditors may qualify and let the ATO consider it. Trading isn't investment.