How long do I need to keep records for? This is a question that we get on a regular basis from our clients.
The answer according to the ATO – you should keep records long enough to cover the period of review (also known as the amendment period) for an assessment that uses information from the record.
Records include things like:
- Bank Statements;
- Copies of Invoices Issued;
- Copies of Invoices/Receipts paid;
- Super Choice Forms;
For a business, typically you need to retain records for a period of 5 years from lodgement date of your return. So, if we hold off lodging your return until the due date then it is safe to say that you need to keep records for 6 years from the end of the respective financial years. As an example, for the 2023 Financial Year your records would need to be kept until June 2029.
There are a few exceptions to this rule:
- If your return is amended, the timeframe recommences when the amendment is lodged.
- If the document relates to numerous periods, for example borrowing costs that are written off over a number of years, you would need to retain records until the review period for the final return has finished.
- For depreciating assets, you need to keep records of the asset for the period of ownership plus 5 years after sale.
- For Capital Gains Tax Assets (e.g. Investment Properties or shares), you need to keep records for the period of ownership plus 5 years after the sale.
For most income tax returns, the amendment period for individuals and small businesses is 2 years from the date on the Notice of Assessment and 4 years for other taxpayers. However, if you have a capital gains tax even or investments then the amendment period extends out to 5 years as above.
For Self-Managed Superannuation Funds, the rules are slightly different. Records such as bank statements, investment reports and invoices need to be kept for 5 years in the same manner as business records.
For more permanent documents, these need to be retained for at least 10 years or (as the name suggests) permanently. These documents include:
- Trust deeds including variations;
- Trustee Minutes;
- Investment strategy;
- Signed Trustee Declarations;
- Records in relation to early access to super
As a rule of thumb, anything that is still relevant today must be retained. For example, if you started a pension 15 years ago and this pension still exists today then you should retain the original signed minutes relating to this pension. Original trust deeds, even if there is a more recent variation, need to be kept permanently until 10 years after the closure of the fund.
q4 financial keep various records to assist with our End-of-Year process, however it is your responsibility to maintain all records for the relevant periods. If you are unsure about the time period relevant for your affairs, please feel free to contact us.