When commencing any self managed superannuation fund (SMSF), there is one over-riding expectation that an adviser will most likely drum into newby trustees again and again — that their fund must meet the sole-purpose test. This is not only to maintain access to the various tax concessions available, but to avoid possible civil or even criminal penalties.
This “sole purpose” is that the fund has been established with the core expectation that it is there to save and make money for each members’ retirement savings. Or, to quote the regulator of SMSFs (the ATO), the fund “needs to be maintained for the sole purpose of providing retirement benefits to members, or to their dependants if a member dies before retirement”. Readmore
