With many practitioners working from home (WFH) and virtually no ability to meet with clients in person, the ability to have clients sign a range of fund documents has become difficult.

When its comes to the signing of financial statements, the law requires these to be signed before the audit is finalised each income year.  It is these concerns that we raised to the Australian Taxation Office (ATO) as part of ongoing dialogue with the SMSF industry to provide additional guidance for trustees.

The ATO has now provided guidance via their COVID-19 frequently asked questions.

Question: I usually attend my accountant’s premises to sign my SMSF’s financial statements. However, I am unable to attend in person to sign them this year due to COVID-19. How can I meet the signature requirements?

The ATO notes that there are options available to trustees. As mentioned above, trustees are required to sign their SMSF’s financial statements before finalising their fund’s audit each income year. COVID-19 impacts such as social distancing or isolation requirements or where the tax agent or accountant working from a home office may prevent the trustees/director(s) from signing the fund’s financial statements in person for the 2018-19 income year (and potentially for the early stages of the 2019-20 financial year).

What options are available?

The ATO advises that there are alternative options available for signing the financial statements.  These consist of:

• returning a signed scanned copy to your tax agent or accountant by email;
• or using an electronic signature such as a digital signature.

Where digital signatures are used, it important to remind professionals and trustees that it should be provided:

• using a secure system, typically through an established third-party provider (e.g. Simple Fund 360 allows you to have client’s sign using a DocuSign integration)
• in a way that clearly identifies the trustee signing and indicates the approval you are providing.

A secure system would include a system that requires a personal identification number, access code or password to use.

If trustees can’t use these alternative options to sign their fund’s financial statements, it is important that the tax agent or accountant posts the financial statements and will require them to be signed and then arrange to be returned by post.  Trustees will not meet the signature requirement by simply acknowledging the financial statements by email or over the phone.

What about SMSF legal documents?

Other than NSW, there has been no temporary relief provided in dealing with the signing and witnessing of various legal documents due to the coronavirus.  NSW has recently introduced a temporary regulation under section 17 of the Electronic Transactions Act, which helps reduce face-to-face contact and makes it easier for people to stay home while still completing essential transactions during the COVID-19 pandemic.  The new law,requires a witness to sight a person signing the document in ‘real-time’ to confirm the legitimacy of the signature, which now allows through the use of video conferencing technology (e.g. skype, zoom, etc).

Refer to the ATO’s SMSF frequently asked questions for further details on their COVID-19 response.