“We have noticed that there is still confusion about the structure and what deductions can be claimed, especially when the SMSF has invested in rental property,” said Mr Chapman.

He reminded SMSF trustees they are only entitled to claim a tax deduction for expenses incurred in keeping an investment property in a good state of repair, not for improvements.

“Remodelling kitchens or bathrooms, or adding a deck or pergola, is not immediately deductible; however, this expenditure may be eligible for a deduction over a number of years under the capital works provisions,” he said.

“The income derived from a rental property and other assets like shares must [also] remain in the SMSF account and cannot be transferred to another entity.”

SMSF trustees should also be aware the fund must be audited by an independent auditor each year and that no personal member expenses can be paid by the fund, he said.

Investments such as works of art cannot be held for the enjoyment of members of the fund, Mr Chapman added.