Welcome to the BETA version of cleardocs.
Switch back to classic

This article is more than 24 months old and is now archived. This article has not been updated to reflect any changes to the law.

clearlaw

Is it time to review your SMSF's investment strategy?

A recent article in the Australian Financial Review reported on the increasing popularity of exchange traded funds (ETFs) as an investment option for SMSFs.

Trustees should be aware that if they intentionally or even accidentally invest in an asset type not permitted under the fund's investment strategy, the trustees will be in contravention of the investment strategy and, likely, the governing rules of the SMSF.

Aside from the legislative requirement, this highlights the importance of regularly reviewing a fund's investment strategy.

Cassandra Townsend, Thomson Reuters

In our earlier ClearLaw article titled "The importance of a comprehensive SMSF investment strategy", our lawyers at Maddocks outlined the SIS Act and Regulations requirements around SMSF investment strategies.

Under the law, a trustee must regularly review the fund's investment strategy. If a fund's investments are not consistent with that strategy, the trustee can:

  • dispose of that asset and where appropriate, reinvest those funds in a permitted investment; or
  • amend the SMSF's investment strategy to permit them to invest in that particular investment provided that it is in the best interests of the SMSF, and have the SMSF's members approve these arrangements.

You can read about how to vary your fund's investment strategy on our website.

More Cleardocs information on related topics

You can read earlier ClearLaw articles on a range of SMSF topics.

Order SMSF related document packages

 

Lawyer in Profile

Leigh Baring
Leigh Baring
Partner
PH: 61 3 9258 3673

Leigh is a partner in the Maddocks Tax & Revenue team.

Leigh regularly provides advice on:

  • structuring of businesses and transactions;
  • mergers and acquisitions;
  • corporate reorganisations and distributions;
  • sale of businesses;
  • demergers;
  • capital raisings;
  • joint ventures and property developments;
  • international tax (both inbound and outbound);
  • succession planning; and
  • liquidations.

His advice covers both direct and indirect tax considerations.

Leigh advises Australian and multinational companies, high net worth individuals, accountants and financial advisers on all areas of taxation law.