ATO crack down on super trustees
The AustralianTaxation Office (ATO) will crack down on self-managed superannuation fund (SMSF) trustees who have failed to lodge returns on the funds for two or more years, with the regulator considering possible fund closures or legal action.
As part of the crack down, the ATO will send out 10,000 letters of notice to SMSF trustees over the next three months advising them they must lodge their fund’s outstanding returns within 28 days.
If they are unable to comply within 28 days, each trustee must then respond to the ATO advising why the matter should not be referred to the Commonwealth Director of Public Prosecutions (DPP) or why a review of the complying status of their fund should not be undertaken.
According to Australian Superannuation Nominees (ASN) managing director Ben Smythe, the ATO’s crack down will create angst and trepidation throughout the SMSF industry.
“This is going to come as a big shock. The ATO has been very helpful [to SMSFs trustees of late and] this is out of left field. It will strain a lot of relationships,” Smythe says.
“It’s unrealistic. The ATO will have to refer quite a few to the DPP,” he says.
Smythe says the ATO will target trustees who have not lodged the 2001 and 2000 returns. The 2000 regulatory return was due in March 2001 and the 2001 regulatory return was due in March 2002.
He says the ATO’s crack down could have been prompted by pressure from other regulatory bodies.
The ATO took over the regulation of SMSFs from the Australian Prudential Regulation Authority (APRA) in late 1999 and has since taken a largely consultative stance towards the supervision of the sector.
But Smythe says the latest development could be seen as the first aggressive move by the ATO against trustees of SMSFs.
“They have drawn the line in the sand, and said we are not going to give special exemptions [to SMSF] because it will create disparity in the marketplace,” Smythe says.
The ATO has advised that there are approximately 10,000 SMSFs that fall within that category, accounting for approximately five per cent of all SMSFs.
However, the ATO has downplayed the action with a spokesperson saying: “We would rather sit down and try and unravel any problems. If there are valid reasons, we will offer an extension and it’s in everyone’s best interest to make a success of these funds.”
Recommended for you
The FSCP has announced its latest verdict, suspending an adviser’s registration for failing to comply with his obligations when providing advice to three clients.
Having sold Madison to Infocus earlier this year, Clime has now set up a new financial advice licensee with eight advisers.
With licensees such as Insignia looking to AI for advice efficiencies, they are being urged to write clear AI policies as soon as possible to prevent a “Wild West” of providers being used by their practices.
Iress has revealed the number of clients per adviser that top advice firms serve, as well as how many client meetings they conduct each week.
