Maintain SMSF compliance with the sole purpose test (s 62)
SMSFs must be maintained for the sole purpose of providing retirement benefits.
Who must comply
SMSF trustees.
What triggers it
Operating an SMSF.
When due
Continuous.
Evidence required
Investment strategy, valuation evidence, related-party transaction documentation, collectibles compliance for in-house assets.
Max penalty
Loss of complying status; non-arm's length income taxed at 47%; trustee admin penalties; potential disqualification
Summary
Section 62 of the SIS Act requires SMSFs to be maintained solely for one or more core or ancillary purposes — primarily provision of retirement benefits. Pre-retirement benefits to members, related party transactions outside the rules, and asset use by members (e.g. collectibles, residential property) breach the test.
Enforced by
Source legislation
Entity types
Topics
Source: https://ato.gov.au/individuals-and-families/super-for-individuals-and-families/self-managed-super-funds-smsf/managing-your-fund/sole-purpose-test. Rules Mate is not a law firm. Always verify against the live regulator source before acting.