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.
Recommended for you
Wealth Data has examined which advice business model has seen the most growth since the start of the year including those that offer holistic advice.
Research conducted by Elixir Consulting and Lonsec has quantified the efficiency gains of using managed accounts in financial advice practices in hours per week saved.
WIth only one-quarter of advice practices actively seeking feedback from clients, the Financial Advice Association Australia has emphasised why this is a critical tool for client retention.
As the government announces a public inquiry into the collapse of Dixon Advisory, risk adviser Richard Silberman has detailed the three areas that typically lead to an AFSL's collapse.