Superannuation Legislation and Regulatory Framework
The statutory architecture
SMSFs sit within the SIS Act, SIS Regulations, the Income Tax Assessment Act 1997 (concessional/caps), and ATO guidance. Know the regulator roles: APRA for prudentially regulated funds, ATO for SMSFs. Understand the complying status concept - a fund must be an Australian superannuation fund and comply with SIS to receive tax concessions. Non-complying status exposes the fund to significant tax on assets.
Core rules candidates must know
- Sole purpose test (s 62): the fund must be maintained solely for retirement and related benefits; no pre-retirement benefit to members or related parties.
- Contribution acceptance rules: age-based work tests, member contribution caps (concessional and non-concessional), and the bring-forward rule.
- Benefit payment standards (SIS Reg 6.01): conditions of release, preservation, and payment methods.
- Borrowing (s 67A/67B): limited recourse borrowing arrangements and the single acquirable asset rule.
- In-house assets: the 5% limit and excluded assets.
- Record keeping and reporting: annual return, member statements, and event-based reporting.
Traps in questions
- Mixing APRA and ATO responsibilities.
- Assuming a breach automatically makes the fund non-complying; compliance status is a separate determination.
- Confusing the sole purpose test with the arm's-length rule.
- Forgetting that contribution caps are per member, not per fund.
Worked example
A trustee asks whether a loan to a member's business is allowed. Test: is it an in-house asset? Is it an arm's-length dealing? Does it breach the sole purpose test? If the loan exceeds 5% of fund assets, it breaches the in-house asset limit and is reportable.