Important message for auditors — ATO wants s 104A trustee declarations retained for life of SMSF (and what to do if they’re lost)

We all know that, since 2007, new SMSF trustees/directors have to sign a trustee declaration pursuant to s 104A of the Superannuation Industry (Supervision) Act 1993 (Cth). However, how long must the declarations be retained for?

Do the declarations only need to be retained for 10 years?

Also, what to do if the declarations are lost?

I have significant experience advising and representing approved SMSF auditors who are being audited by the ATO and/or have been referred to ASIC. I draw on this experience to address these questions.

Has the ATO has been flagging this issue?

The ATO’s website contains the key topics discussed at the SMSF Auditors Professional Association Stakeholder Group meeting on 10 December 2024. You can find this page by visiting www.ato.gov.au and entering in the search function ‘103807’. Here, the ATO state:

The main issues identified from compliance cases includes:

* a failure of the auditor to check that trustee declarations have been …retained under regulation 104A [presumably the ATO mean ‘section’, not ‘regulation’]

An equivalent page from the July 2024 meeting can be found by performing an equivalent search for ‘102974’. In that equivalent page, the ATO similarly state:

The main issues identified from compliance cases includes:

… failure to check that trustee declarations have been … retained under regulation 104A [again, presumably the ATO mean ‘section’, not ‘regulation’]

How long must a s 104A trustee declaration be retained for?

Assume that an SMSF was established in 2008 with individual trustees. Also, assume that no changes in trusteeship have occurred. Does that mean that today, more than 10 years after establishment, there is no need to retain the declarations? Similarly, does that mean that today, there is no need for the SMSF’s approved SMSF auditor to check for trustee declarations?

At ATO webpage QC 45566, the ATO publish tables that set out the minimum that the ATO expect to see evidenced in an SMSF audit if the ATO were to carry out a compliance review in relation to an SMSF auditor. The table states:

Minimum expectation of audit checks

Table 1A: Audit checks under the SISA

The Auditing and Assurance Standards Board issues Guidance Statement GS 009 Auditing Self-Managed Superannuation Funds. GS 009 contains ‘the specific criteria and corresponding provisions … which are required to be reported on in the auditor’s report and the ACR…’ Here, GS 009 states:

Note the use of the word ‘or’. This implies that after 10 years, the declaration no longer needs to be retained.

Similarly, GS 009 states:

1. 316. In auditing the SMSF’s compliance with the requirements regarding establishment and operation of the SMSF, the auditor conducts testing to determine that: … (d) the SMSF has and retains trustee declarations of duties signed by any new trustees after 30 June 2007 for at least 10 years …

However, on ATO webpage QC 63436, the ATO state:

Note: You must keep your completed declaration for the life of the SMSF and for at least 10 years after your SMSF winds up.

Furthermore, the actual declaration (ATO code NAT 71089-06.2021) contains the following text:

I must ensure this document is retained for at least 10 years or while I remain a trustee or director of the corporate trustee (whichever is longer)

How long must a s 104A trustee declaration be retained for?

As shown above, there is conflicting material on how long a s 104A trustee declaration should be retained for.

I have seen the ATO (when auditing approved SMSF auditors’ files of post 2007 SMSFs) consider this issue. There, I have seen the ATO criticise auditors for not having copies of s 104A trustee declarations. This is even where the trustee/directors were appointed more than 10 years ago (but after 30 June 2007).

Accordingly, I have seen the ATO take the view that the s 104A trustee declarations retained for life of SMSF (or potentially at times even longer).

I do not comment on the correct legal view. Nor do I comment on industry practice. However, I do observe that most approved SMSF auditors wish to quickly satisfy the ATO should the ATO audit/review the approved SMSF auditors’ audit files.

What if s 104A trustee declaration is lost?

A few days ago, the ATO updated their guidance regarding ‘Auditor contravention report instructions.’ You can find these instructions by visiting www.ato.gov.au and entering in the search function ‘17603’. Here, the ATO now inserted the following new wording:

Examples of contraventions that should be reported in the year they occur and not in subsequent years (unless repeated) include contraventions of section[] … 104A …of the SISA.

Accordingly, if the s 104A trustee declaration is lost, it appears that the ATO want an auditor contravention report lodged, but only once.

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This article is for general information only and should not be relied upon without first seeking advice from an appropriately qualified professional. The above does not constitute financial product advice. Financial product advice can only be obtained from a licenced financial adviser under the Corporations Act 2001 (Cth).

Note: DBA Lawyers presents monthly online SMSF training. For more details or to register, visit www.dbanetwork.com.au or call 03 9092 9400.

For more information regarding how DBA Lawyers can assist in your SMSF practice, visit www.dbalawyers.com.au.

By Bryce Figot ([email protected]) Special Counsel, DBA Lawyers

DBA LAWYERS

1 April 2025