Audit tells ATO to do more
The Australian National Audit Office (ANAO) has told the Australian Taxation Office (ATO) that irrespective of the increased funding it has received and the improved systems it has put in place, the ATO still has more work to do to ensure self-managed superannuation funds (SMSFs) meet their compliance obligations.
In an audit report handed down this month, the ANAO said, “notwithstanding the increase in compliance activity, the ANAO considers that the ATO has significant potential to establish more effective processes for identifying and mitigating SMSF compliance risks”.
“Until it does so, it will not be in a position to provide adequate assurance that its compliance approach is effective and that SMSFs are complying with their obligations,” the audit report said.
The ANAO also used its audit report to caution the ATO over its announcement in September that it intends giving interpretative non-binding decisions with respect to the Superannuation Industry Supervision Act (SIS Act).
The audit report warned that the ATO needed to make the status of its interpretative decisions clear in circumstances where in 2002 the ATO issued a number of product rulings on the income tax consequences of investing in instalment warrants.
The ANAO said that although the product rulings referred only to the income tax arrangements applicable to instalment warrants, indirect reference was made by the ATO to superannuation funds being a ‘participant’ in these warrants.
It said stakeholder feedback received by the ANAO during the audit suggested that, as a result, some investors saw the product rulings as an endorsement of instalment warrants as legitimate SMSF investments.
AUTHOR
Mike Taylor
Recommended for you
With Insignia Financial suffering a cyber attack on its Expand platform, this can potentially have a negative impact on the two private equity bids currently in play for the firm.
State Street Global Advisors has made an equity investment in Ethic, a platform helping financial advisers to produce bespoke portfolios, reflecting the greater client demand for customised portfolios.
WT Financial’s new entity with Merchant, Investco, has entered into a heads of agreement to merge three financial advice firms.
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
