Skip to content

Retention and Compliance

Document retention is a critical legal requirement. Records Manager helps you comply with country-specific regulations by tracking how long documents must be kept and when they can be safely deleted.

Why Retention Matters

Tax authorities and regulatory bodies mandate minimum retention periods:

  • ATO (Australia): 7 years for most tax documents

  • IRS (United States): 3-7 years depending on document type

  • HMRC (United Kingdom): 7 years for self-assessment records

Consequences of Non-Compliance

  • Penalties for missing records during audit

  • Inability to substantiate tax deductions

  • Legal exposure in disputes

  • Trust compliance issues

How FSA Classification Determines Retention (AUTOMATIC)

CRITICAL: When you classify a document with an FSA (Function/Service/Activity) path, the system automatically determines and applies the correct retention period.

Automatic Retention Assignment

How it works:

  1. You classify a document: FSA/FinancialRecords/Banking/AccountStatements
  2. System extracts Activity level: "AccountStatements"
  3. System looks up retention via TaxonomyExpert.getRetentionForActivity()
  4. System applies BOTH tags atomically:
  5. FSA/FinancialRecords/Banking/AccountStatements
  6. RETENTION/7-years (automatically determined)

Why this matters:

  • No manual retention selection - Classification drives retention automatically
  • Guaranteed compliance - Retention based on legal requirements for Activity type
  • Prevents gaps - Every FSA-classified document MUST have retention tag
  • Country-specific - Retention varies by country (AUS/USA/GBR) but applied automatically
  • Atomic application - FSA path and retention tag applied together, never separately

Common FSA → Retention Mappings

Financial Records: - FSA/FinancialRecords/Banking/AccountStatements → RETENTION/7-years (ATO) - FSA/FinancialRecords/Tax/TaxReturns → RETENTION/7-years (ATO) - FSA/FinancialRecords/Investments/DividendStatements → RETENTION/7-years (ATO)

Trust Administration: - FSA/TrustAdministration/LegalDocumentation/TrustDeed → RETENTION/permanent - FSA/TrustAdministration/Governance/TrusteeResolutions → RETENTION/7-years (ATO) - FSA/TrustAdministration/Compliance/FamilyTrustElection → RETENTION/5-years-from-FTE

Health Management: - FSA/HealthManagement/MedicalCare/Consultations → RETENTION/7-years (ATO medical expense) - FSA/HealthManagement/DentalCare/Consultations → RETENTION/7-years (ATO medical expense) - FSA/HealthManagement/Prescriptions/Medications → RETENTION/5-years

What this means for you:

When Records Manager suggests classifying a bank statement, you get: - Classification: FSA/FinancialRecords/Banking/AccountStatements - Retention: RETENTION/7-years (automatic, no input needed) - Legal basis: ATO Record Keeping Requirements

You classify once, compliance is automatic.

Retention Periods (Australia)

Financial Documents (7 years)

Document Type Retention ATO Reference
Tax Returns 7 years Section 254, Tax Administration Act 1953
Tax Assessments 7 years ATO requirement
Invoices 7 years Income and deduction substantiation
Receipts 7 years Expense substantiation
Bank Statements 5 years Income and deduction evidence
Investment Statements 7 years Capital gains tax calculation
Superannuation Statements 7 years Contribution and balance records
Dividend Statements 7 years Investment income substantiation
Loan Documents 7 years Interest deduction evidence
Mortgage Statements 7 years Interest deduction substantiation

Medical Records (7-10 years)

Document Type Retention Reason
Medical Receipts 7 years Tax deduction substantiation
Test Results 7 years Medical history and tax
Prescriptions 5 years Medical expense substantiation
Health Records 10 years Long-term personal health history
Referral Letters 5 years Treatment substantiation

Insurance Documents (10 years)

Document Type Retention Reason
Insurance Policies 10 years Until expired + claims period
Insurance Claims 7 years Tax deduction + dispute period
Home Insurance 10 years Current + expired policy
Vehicle Insurance 10 years Current + expired policy
Health Insurance 10 years Current + expired policy
Document Type Retention Reason
Contracts 10 years Statute of limitations
Wills 15 years Permanent personal record
Powers of Attorney 15 years Permanent legal record
Lease Agreements 7 years Contract statute of limitations
Loan Agreements 7 years Contract and tax substantiation

Trust Documents (5-15 years)

Document Type Retention Reason
Trust Deed 15 years Permanent trust record
Family Trust Election (FTE) 5 years from FTE date Special ATO rule (not EOFY)
Trustee Resolutions 7 years Distribution substantiation
Distribution Minutes 7 years Distribution evidence
Beneficiary Declarations 7 years Entitlement evidence
Annual Financial Statements 7 years Income tax substantiation
Unit Registry 15 years Permanent ownership record
Unit Distribution Statements 7 years CGT calculation evidence

Identity Documents (5-15 years)

Document Type Retention Reason
Birth Certificate 15 years Permanent personal record
Passport 10 years Until expired + travel history
Driver License 5 years Until renewed
Medicare Card 5 years Current card + claims evidence
Marriage Certificate 15 years Permanent legal record
Citizenship Certificate 15 years Permanent personal record

Retention Workflow

Check Individual Document

User: "Check retention for document 1234"
AI: "Document #1234: Medical Receipt - Dr Smith"
    "  Created: 2024-03-15"
    "  Retention: 7 years"
    "  Retain Until: 2031-03-15"
    "  Reason: ATO tax deduction substantiation"
    "  Status: Keep - retention period active"

Check by Category

User: "Check retention for all tax documents"
AI: "Tax Document Retention Status:"
    "  Tax Return 2018: Retention expires 2025-10-31 (safe to delete after)"
    "  Tax Assessment 2020: Retention expires 2027-11-15 (keep)"
    "  Invoice #4567: Retention expires 2028-03-20 (keep)"
    ""
    "  Documents past retention: 1"
    "  Documents within retention: 2"

Check Before Deletion

User: "Can I delete my 2018 documents?"
AI: "Analyzing 2018 documents for deletion eligibility..."
    ""
    "SAFE TO DELETE (24):"
    "  - Bank Statements (5-year retention expired)"
    "  - Utility Bills (2-year retention expired)"
    "  - Receipts (5-year retention expired)"
    ""
    "⚠️  MUST KEEP (8):"
    "  - Tax Return 2018 (7-year retention until 2025-10-31)"
    "  - Insurance Policies (keep until expired + 10 years)"
    "  - Legal Documents (10-year retention until 2028)"
    ""
    "Recommendation: Delete safe documents, retain others"

Special Retention Cases

Family Trust Election (FTE)

CRITICAL: FTE retention is calculated from the FTE lodgment date, NOT EOFY.

This is a common source of confusion. The ATO specifically requires FTE documents to be retained for 5 years from the lodgment date of the FTE itself.

User: "When can I delete my Family Trust Election document?"
AI: "Family Trust Election Date: 2020-02-01"
    "Retention Period: 5 years from FTE date"
    "Retain Until: 2025-02-01"
    ""
    "⚠️  DO NOT DELETE before 2025-02-01"
    "ATO Requirement: Section 272-80 ITAA 1936"
    "Reason: FTE must be retained for 5 years from lodgment date"
    ""
    "Current Date: 2025-01-20"
    "Days Remaining: 12 days"
    ""
    "After 2025-02-01, you may safely delete this document"

Why this matters: * EOFY is June 30, but FTE lodgment could be any date * Deleting FTE before 5 years from lodgment risks entire trust structure * ATO can request FTE during audits to verify trust eligibility

Pre-EOFY Trustee Resolutions

Trustee resolutions made before June 30 each year document the trustee's intention to distribute income. These must be retained for 7 years.

User: "Check retention for trustee resolutions"
AI: "Trustee Resolutions - Retention Status:"
    "  Pre-EOFY Resolution 2023: Retention until 2030-06-30"
    "  Pre-EOFY Resolution 2022: Retention until 2029-06-30"
    "  "
    "  Required for: ATO distribution substantiation"
    "  ATO Reference: Section 100A ITAA 1936 compliance"

Permanent Records

Some documents should essentially never be destroyed:

  • Trust Deeds: Foundational trust documents

  • Wills: Estate planning documents

  • Powers of Attorney: Legal authority documents

  • Birth/Marriage/Death Certificates: Vital records

  • Company Constitutions: Corporate governance documents

Retention Audit Workflow

Annual Retention Review

User: "Run retention audit for all documents"
AI: "Retention Audit Results:"
    ""
    "Total Documents: 1,247"
    "Within Retention: 1,198"
    "Past Retention: 49"
    ""
    "Documents past retention (49):"
    "  Category            | Count | Earliest   | Safe to Delete"
    "  ------------------- | ----- | ---------- | -------------"
    "  Bank Statements     | 24    | 2018-01-01 | ✓ Yes"
    "  Utility Bills       | 18    | 2018-03-15 | ✓ Yes"
    "  Tax Returns         | 3     | 2017-07-01 | ✓ Yes"
    "  Receipts            | 4     | 2017-11-20 | ✓ Yes"
    ""
    "Recommendations:"
    "  1. Archive bank statements (minimal value)"
    "  2. Delete utility bills (no ongoing value)"
    "  3. Review tax returns with accountant before deletion"
    "  4. Archive receipts with potential warranty claims"

Quarterly Retention Check

User: "Check retention status for this quarter"
AI: "Quarterly Retention Status:"
    ""
    "Expiring This Quarter:"
    "  - FTE Document: Smith Family Trust (expires 2025-02-01)"
    "  - Tax Return 2018: Retention expires 2025-10-31"
    ""
    "Action Required:"
    "  1. Plan FTE archival after 2025-02-01"
    "  2. Review 2018 tax return for archival"

Retention by Country

Australia (Default)

  • Tax records: 7 years

  • Trust deeds: 15 years (permanent)

  • FTE: 5 years from FTE date (special rule)

United States

  • Tax returns: 7 years (IRS recommendation)

  • Supporting documents: 7 years

  • Employment records: 7 years

  • Insurance policies: Until expired + claims period

United Kingdom

  • Self-assessment records: 7 years (HMRC)

  • SA302 forms: 7 years

  • P60/P11D: 7 years

  • Medical records: 10 years (NHS guidance)

Retention Best Practices

1. Calculate Retention from Document Date

Not current date. Use created or document date:

Correct: Document dated 2020-06-01 → Retention until 2027-06-01
Incorrect: Document uploaded 2024 → Retention until 2031

2. Track FTE Dates Separately

For Family Trust Elections, record the FTE lodgment date:

Document: Family Trust Election
FTE Date: 2020-02-01 (not EOFY 2020-06-30)
Retention Until: 2025-02-01 (5 years from FTE date)

3. Use Tags for Retention Tracking

Tag documents with retention requirements:

retention:7yrs
retention:permanent
retention:fte-2025-02-01

4. Set Calendar Reminders

For critical retention dates:

* FTE Retention Review: 30 days before expiration

* EOFY Document Review: May each year

* Annual Retention Audit: First week of new financial year

5. Archive, Don't Delete

For documents past retention but with potential value:

* Move to archive storage

* Remove from active search

* Keep for "just in case" scenarios

Deletion Safety

Never Delete Without Checking

Always run retention check before deletion:

User: "Delete old documents"
AI: "⚠️  WARNING: Always check retention before deletion"
    "Run: 'Check retention for [documents]' first"
    ""
    "Some documents cannot be legally deleted even if old:"
    "  - FTE documents (5 years from FTE date)"
    "  - Trust deeds (permanent)"
    "  - Active insurance policies"

Mandatory Confirmation

Deletion always requires explicit confirmation:

I understand this cannot be undone and I want to proceed with deleting N documents

Audit Trail

All deletion decisions are logged:

Deletion Log Entry:
  Date: 2025-01-20
  User: [username]
  Documents: 24 (Bank Statements from 2018)
  Reason: Past 5-year retention period
  Confirmation: Exact phrase confirmed

CLI Retention Commands

# Check retention for a document
bun run RecordManager.ts retention --doc-id 1234

# Check retention for domain
bun run RecordManager.ts retention --domain household

# Check retention for document type
bun run RecordManager.ts retention --type "Invoice"

# Full retention audit
bun run RecordManager.ts retention --audit

Retention Calendar

Monthly

  • Check for documents nearing retention expiration

  • Review FTE retention status (if applicable)

Quarterly

  • Review retention status for quarter

  • Plan archival for expiring documents

Annually (EOFY)

  • Full retention audit

  • Archive expired documents

  • Update retention tracking

  • Review trust document completeness

Multi-Year

  • Trust deeds: Keep forever (essentially permanent)

  • Wills and powers of attorney: Keep forever

  • Vital records: Keep forever