SMSF Property Insurance

Here at HQB Chartered Accountants, many of our clients have their own self-managed superannuation fund (SMSF). If this is you, we would like to raise some important points regarding audit issues around real property. Trustees of SMSF’s like to invest in property. As a result, most of the value of the fund is tied up in these assets. Trustees are responsible for exercising skill and diligence in managing their funds, which includes ensuring their properties are adequately insured. The auditor will therefore ask you for:
– Building insurance policy documents to verify that insurance is in place
– Proof that premiums have been paid and the policy is in force
– Documents to assess that the level of cover is adequate when considered with the current market valuation.

The auditor will also want to confirm that the policy is in the name of the property owner. This is usually the name of the trustee for the SMSF, but can be the name of the custodian trustee of the bare trust in the case of a limited recourse borrowing arrangement (LRBA).

If you would like more information on this article, please contact our office.

Posted 18.10.17

This article is compiled as a helpful guide for your private information and is subject to copyright. We suggest that you do not act solely on the basis of material contained in this article because items are of general nature only and may be liable to misinterpretation in particular circumstances. We recommend that our advice be sought before acting on any of these crucial areas.