Barbara Smith's New (Financial) Year Resolutions for your DIY

Every July you get a fresh chance to put your DIY fund on the best possible setting as the new financial year unfolds. In the recent times I've created a checklist - Follow it to the letter and you'll be off to a great start for the year to June 2006.

1. Update your super fund records for the year ended 30 June 2005

We all know that it is tedious getting super fund records up to date, but it's got to be done, and the longer we leave it the harder it is to remember what happened in our SMSF last year and to gather all the relevant documents, such as dividend statements and purchase and sale contract notes. It is also harder to get information about the value of your assets.

2. See your accountant

Once your records are in order, make an appointment to see your accountant to get your fund's accounts prepared for the annual audit so that the annual tax and regulatory return can be finalised and lodged with the ATO. This is particularly important if your fund is entitled to a refund of imputation credits and/or excess tax, because the refund can then be reinvested to earn you more for your retirement.

3. Start keeping updated records for 2005-06

Once you have got the 2004-05 records up to date, keep going and update your records regularly. This way, you will keep up to date and you will know at any time the status of your fund '” and you won't have to spend hours sorting things out after 30 June 2006. Good accurate records should mean lower accounting costs and better trustee decisions. So, if you have been thinking about using an SMSF specific software package, start from 1 July.

4. Make sure that your SMSF's assets are secure

One of the covenants in the Superannuation Industry (Supervision) Act 1993 (SISA) requires you to keep money and other assets of your SMSF separate from your personal assets and the assets held by employers who contribute to your fund. You therefore need to make sure that your SMSF's ownership of its investments is assured by holding the fund's assets in a legally recognised ownership arrangement.

You can do this by checking that all assets are held in the names of all of the individual trustees as trustees for the SMSF, or in the name of the company as trustee for the fund where there is a corporate trustee. If this is not possible '” restrictions in some states may prevent SMSFs from holding assets using the fund's name '” record this restriction in the minutes of your trustee meeting and execute a caveat, legal instrument or declaration of trust for that asset so as to clearly identify your SMSF's ownership.

Resolve to keep the books and accounts of your SMSF separate from those of other entities so that ownership of the assets is clear and not at risk of being lost to other parties due to bankruptcy proceedings, fraud, theft etc.

5. Check your investments and your investment strategy

It is important for the trustees of an SMSF to review your investment strategy annually. You need to do this, first, to make sure that it is still suitable for the circumstances of your SMSF and its members; and, second, to make sure that your investments are in line with your investment strategy. If you find it needs to be revised, make a resolution to do it.

If your fund is holding too much cash, ask yourself why, and, unless there is a valid reason, stop procrastinating and, after making appropriate investigations and/or seeking professional advice, invest it to earn more income and capital gains.

6. Exercise your right to choose your SMSF as your chosen fund

If you are an employee and your employer has given you a standard choice form, and you want to direct your superannuation guarantee contributions to your SMSF, complete Part B of the form and return it to your employer with the necessary attachments as soon as possible.

7. Don't procrastinate

One of our greatest enemies is procrastination, so make sure that you implement your new financial year's resolutions, now!