There are publicly available superannuation programs which do all this correctly that you are welcome to use, the three main players are:

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1 Self Managed Superannuation Funds (SMSF's) are the most highly regulated entity available to most people. When coupled with the most severe penalties for breaching the Law, it is highly important that you ensure that your SMSF stays within the rules at all times. We at MCA are able to assist with most of the operations of your SMSF, and in particular ensuring that your SMSF is compliant with the Law. To assist you, we have detailed below most of the obligations you face in running your SMSF, and along with it how MCA can help you with each item. Prices are all detailed on our SMSF Price List. Annual accounts Bookkeeping / Data entry This can be done by you in MYOB, a cashbook, an excel spreadsheet etc, but chances are that we will have to reenter it all into our superannuation program from bank statements. This is because of the way superannuation balances are calculated and profits are allocated - which is based on the average daily balance of each member. For example, Mr X contributed $25,000 on day 1, this was invested and a profit of $10,000 was made, and then on day 365 Mrs Y invested $25,000. Under "traditional" accounting methods and programs, that $10,000 will be split evenly, whereas the correct way is to allocate the profit is to give the full $10,000 to Mr X (because it was his super that earned it). This can get much more complicated with multiple contributions (e.g. employer contributions quarterly), pensions, withdrawals, and everything else that your SMSF does. There are publicly available superannuation programs which do all this correctly that you are welcome to use, the three main players are: BGL's Simple Fund 360; Class Super; and Super Concepts We use and recommend BGL s Simple Fund should you look to prepare the day-to-day accounts yourself. MCA can assist by doing all of your bookkeeping, assisting you with your bookkeeping, or just helping you setup your bookkeeping in appropriate software. We offer two options should you wish for MCA to do the day-to-day work in your fund: A fixed fee solution where MCA processes your SMSF on a monthly basis and includes all requirements of your SMSF such as financial statements, tax return, audit, and documentation; or The traditional year end solution where fees are based on the time taken to perform the job. Preparation of financial statements Financial statements need to be completed annually and must comply with the various Laws and Regulations. MCA can complete your financial statements in a professional format that contains all of the information required by Law. EOY solutions: The price is determined by our hourly rates Preparation and lodgment of income tax return Document Version: 21 July 2017 Our SMSF Services Page 1 of 7

2 Just like any other entity, a SMSF must complete an annual tax return. MCA can complete your tax return from the audited financials. EOY solutions: The fee is $220 and prepared from your audited financial statements Completion of annual audit Every SMSF must be audited annually by someone independent to the accounts preparation. We do this by separating our staff between the accounts preparation functions and audit functions. MCA can audit your superannuation fund. EOY solutions: The price is determined by our hourly rates and typically starts at $600. Actuarial Certificate If your SMSF is paying a pension, then a % of its earnings is tax-free (e.g. if 50% of the members balances is paying pensions, then 50% of the earnings is tax-free). In order to claim this tax-free amount, an actuary needs to make the calculation (which is a much more complicated calculation than the simple example above) and provide a certificate of such. MCA can apply to its actuary when required. Fixed fee solutions: We compile these documents automatically (where possible) and is included in the pension add-on price EOY solutions: The fee is $220 Asset Valuation Assets in your SMSF need to be reported at market value. For some assets this is more difficult than others. Shares and other managed investments are relatively easy and the ATO's requirement is that property needs to be revalued every 3 years at the longest to comply with this condition. Assets also need to be revalued any time you start a pension or make any other major change to the fund. Valuations don't necessarily need to be an official one done by a qualified valuer, any professional estimation based on a professional basis is generally acceptable (e.g. an estate agent's appraisal). MCA can assist in the following ways: For listed shares and most managed funds: MCA will automatically re-value these in your accounts for both fixed fee and EOY solutions. For residential property: MCA can organise an estimate from RP Data Property Services and we will advise on the fees at that time For private shares: You will need to forward a copy of the financial statements of the company so MCA can work out the approximate market value. For all other assets: Unfortunately MCA is not able to assist in getting a market value. Document Version: 21 July 2017 Our SMSF Services Page 2 of 7

3 SMSF setup documentation Superannuation deed Your deed contains all the rules of your SMSF. Most deeds are generic and basically let the SMSF do all things the Law will, but if you have any particular rules you want implemented, we can assist with this. Deeds that are older than around 2008 may not allow some of the things that are now allowable by Law, such as: Borrowing; Receiving Government Co-Contributions (yes, some deeds don't allow you to accept them); Leaving your money in super past 65 (yes, some deeds made it compulsory to draw all your super out as 65, or upon retirement, or upon some other condition that no longer exists by Law). Recent changes to Law s may mean that some newer deeds are already past their use by date. In short, if you want to ensure your deed allows you to do everything that current day Law allows (and that you are not restricted to Laws that existed in the past), you should consider updating your deed. Regardless, we recommend updating your deed on a regular basis. MCA can assist with new SMSF setups & deed amendments by ordering deeds for you and completing all relevant minutes, forms, declarations, etc. (note: most of the fees involved here is the cost of obtaining the deed from a solicitor, not MCA's fee). Change of trustee / Conversion from individual trustees to company trustee Many SMSF's are set up with individual trustees - which is allowable by Law, but not the optimal setup for a few reasons: Lump-Sum withdrawals may not be permitted It is argued that the way the law is written, SMSF's with individual trustees are only permitted to pay pensions to its members, and cannot pay any benefits out via lump-sum withdrawals. Our view is its better to be safe than sorry and get a company trustee. Increased ATO penalties Under the ATO's penalty regime, penalties are levied on the SMSF on a per trustee basis. If you have a company trustee, there is only 1, so the penalty is not multiplied. If you have individual trustees, then your penalty is multiplied by the number of members in your SMSF (because all members must be trustees under this setup). This can quickly turn a reasonable penalty into a substantial one. Separation of assets One of the rules surrounding an SMSF is that all assets must be held separately from the personal assets of the members and trustees. If you have a company trustee, that's easy - all assets in the name of that company are SMSF assets. If you are individual trustees, it s harder to prove that those shares in your name are the SMSF's and not yours. Document Version: 21 July 2017 Our SMSF Services Page 3 of 7

4 MCA can assist with all conversions to company trustees by ordering a new company (or converting an existing one) for you and completing all relevant minutes, forms, declarations, etc. (note: most of the fees involved here is the cost of obtaining the deed from a solicitor, not MCA's fee). Fixed fee solutions get a discount on SMSF deed upgrades. Application for membership To be a member, you must apply in writing to be a member and have that membership accepted by the SMSF (again, in writing). Consent to act as trustee (or director of trustee company) To be a trustee, you must consent to the appointment in writing and have it confirmed by the SMSF (again, in writing). ATO trustee declaration If you became a trustee (or director of the trustee company) after 1 July 2007, you need to have this ATO form completed. General record keeping Original documentation of all transactions This one's pretty basic - when you spend money, keep the invoice. If you buy an asset, keep the purchase documentation. All of this documentation needs to be available for your auditor as without it, they cannot check that the transactions are what the records say they are. Documentation needs to be kept for a minimum of 5 years (with certain documentation longer). This is one thing we can't really assist you with. You are welcome to send us documentation as you get it through the year (as opposed to all at the end of the year), but MCA doesn't provide a document storage facility, so all your documents will be returned once the tax return is done. Document Version: 21 July 2017 Our SMSF Services Page 4 of 7

5 Documentation detailing that every decision made by the fund was approved by all trustees As all members share equally in the decisions of the fund, and the only way to prove that this has actually occurred is for all members to "sign off" on documentation detailing each decision. This is normally done via a minute of a meeting (on the presumption that you held a meeting to make that decision), but realistically formal meetings are not always held, in which case a "circulating resolution" can be signed by all members. All "day to day" business can be covered by an end of year resolution (that MCA will automatically do when we prepare your financial statements), but major decisions should be separately documented. Declaration of trusts Where assets are held in the name of the trustee (e.g. it is not possible to have a super fund named on a title of land, so the title will show the name of the trustees). Because the asset is in the name of the trustee, a declaration of trust needs to be signed by the trustees stating that the asset is not theirs personally, but they are holding "in trust" for the SMSF. MCA can provide you with sample documentation (note: MCA cannot fill this form out for you as it constitutes legal advice to which we are not authorised to provide). Fixed fee solutions: We will forward samples automatically (where possible) and is included in the price Investment strategy By Law, your SMSF needs an investment strategy that outlines what the overall plan of your fund is, and what investments you are going to make to achieve it. It may be that you believe you have sufficient funds and your plan is to invest in low risk assets only to protect your capital, or maybe you are more adventurous and believe your investment smarts can play the market. Whatever it is, it needs to be documented, your investments actually have to match it, and it needs to be reviewed and updated at least every 3 years. MCA can provide you with sample documentation or assist you with filling out the sample based on your current situation (without advice on its appropriateness to your circumstances or goals). If you wish for MCA to assist with formulating your investment strategy, you need to make an appointment with our financial planner. Fixed fee solutions: We will forward samples automatically (where possible) and is included in the price Death Benefit Nominations If a member wishes to nominate a person or persons that their superannuation is distributed to upon their death, they need a Death Benefit Nomination (as you generally cannot deal with your superannuation from within you will). preparing these for you (note: MCA cannot provide legal advice as to how best to distribute you money). Document Version: 21 July 2017 Our SMSF Services Page 5 of 7

6 Contributions to super "Intent to Claim" form When you personally make a contribution, your SMSF needs to know how much of it you intend on claiming as a tax deduction so it can tax it correctly inside the SMSF. If you are looking to claim some of it on your tax return, you need to get a reply from the SMSF confirming the amount. Withdrawing your super Lump-sum withdrawals When you want to make a withdrawal from super, you need to apply and demonstrate that you are eligible by meeting a "condition of release" (i.e retired, age of 65, etc). The SMSF then needs to approve the application. All of this needs to be in writing for the auditor (and general record keeping requirements) Where the recipient is taxed on part of the withdrawal, an ETP Statement needs to be created so they can include it on their tax return. Pensions As per lump-sum withdrawals, you need to apply and show that you are eligible, approve it, and put it all in writing. When you are receiving a pension, there are minimum amounts that need to be withdrawn based on your pension balance. If your pension is a "transition to retirement" pension, there is also a maximum of 10%. Where the recipient is taxed on part of the pension, a group certificate needs to be created so they can include it on their tax return. If the pension documentation is incorrect, then the pension may be invalid and all pension payments may be treated as an illegal release of super. Same goes for if the pension payments are under the minimum, or over the maximum. Fixed fee solutions: We compile these documents automatically (where possible) and is included in the pension add-on price Document Version: 21 July 2017 Our SMSF Services Page 6 of 7

7 Other Provision of an Electronic Service Address From 1 July 2014, all SMSF's need to have an "electronic service address" so they can receive notifications of contributions and other notices electronically. This is part of the Government's "Simpler Super" reform, and is mandatory for all SMSF's. Please note: An address is not an electronic service address. An electronic service address needs to be obtained from a provider registered with the ATO. MCA can organise your registration, and can obtain a discount on the annual renewal fee on an electronic service address with Australia Post. Fixed fee solutions: This is included in the price EOY solutions: We will advise of the appropriate cost at that time Disclaimer We have provided this document as a very basic guide which is intended to assist people in improving their understanding of the tax laws and how they operate. When considering what actions to take however, there are more factors that should be considered. This is not intended to be a comprehensive document that can be taken as tax advice, financial advice, or any other kind of advice. The content does not consider any of your personal circumstances and is only generic in nature. This document is not to be taken as advice under any circumstances. If you are considering acting based on anything written in this document, we suggest you seek professional advice first. If you have any questions, you can contact M.C.A. Accountants Pty. Ltd. by phone on , by at admin@mcaaccountants.com.au, or by post at PO Box 8095, Carrum Downs, VIC, We will not accept liability for anyone relying on the contents of this document Document Version: 21 July 2017 Our SMSF Services Page 7 of 7