ATO to increase examination of SMSFs

The head of technical services at a leading fund manager has warned financial planners that self-managed superannuation funds (SMSFs) are likely to come under greater tax scrutiny as a result of the simplified super regime.

According to Mariner Financial’s Kate Anderson, the Australian Taxation Office (ATO) has sharpened its focus on SMSFs, as it is anticipating these types of super funds will escalate in numbers because of the changes announced in last year’s Federal Budget.

“Auditors previously had to report to the ATO breaches of the SIS (Superannuation Industry Supervision) Act, such as loans to members and acquiring assets from related parties, and as a result of that the ATO is going to be increasing its monitoring of SMSFs,” she said.

The situation is not quite as sinister as it sounds though, as the ATO has indicated it will assist SMSF trustees with compliance issues along the way.

“To make it easier for members and trustees, the ATO is going to start putting out product rulings or rulings specific to SMSFs in relation to key contraventions of the Act. That will make the adviser’s role a little bit easier as well,” Anderson said.

She also reminded planners that the ATO would be keeping a close eye on tax avoidance measures that may be incorporated with any of the superannuation strategies adopted before June 30 this year.

“Last December, the Assistant Treasurer said he’d be watching all these fancy strategies that people are embarking on . . . [to get] around paying tax. If the ATO sees anything that they don’t like they will be backdating it [the activity and penalty] to December 7, [2006],” Anderson explained.

While she warned about this possibility, Anderson said she didn’t know how the ATO planned to police this intention.