ATO warns ‘at risk’ SMSFs on breaches
The Australian Taxation Office (ATO) has issued a stern warning to the 560,000 Australians managing their own super by releasing guidelines clearly outlining instances in which trustees of small do-it-yourself funds will be in breach of the law.
The ATO has been regulating the more than 300,000 self-managed super funds in existence since 1999 to ensure compliance under the Superannuation Industry (Supervision) Act 1993 (SIS Act).
“In 2004-05, we are increasing our audit activity on ‘at-risk’ funds to ensure all tax obligations are met. This will include taking a firm approach with trustees who fail to make a genuine effort to comply, or who set out to deliberately avoid meeting their legal obligations,” ATO tax commissioner Michael Carmody says.
As part of its crackdown, the ATO has released an advice booklet titled DIY Super: It’s Your Money…But Not Yet!
“The booklet sets out our approach to administering self-managed super funds and highlights our preference for helping people to follow the rules,” Carmody says.
The consequences of members and trustees, auditors or tax agents breaching the rules involve a range of actions, some with serious penalties attached, Carmody says.
“We are concerned about how some self-managed super funds are managed, so we are increasing our audit activity on high-risk funds to ensure all tax obligations are met,” he says.
Carmody says common breaches under the SIS Act include purchasing an investment that gives an immediate benefit to a member or associate, not keeping the assets of the superannuation fund separate from the personal assets of the members, running a business within the fund and lending money or providing financial assistance to a member or a member’s relative.
Recommended for you
AMP is to launch a digital advice service to provide retirement advice to members of its AMP Super Fund, in partnership with Bravura Solutions.
Unveiling its performance for the calendar year 2024, AMP has noted a “careful” investment in bitcoin futures proved beneficial for its superannuation members.
SuperRatings has shared the median estimated return for balanced superannuation funds for the calendar year 2024, finding the year achieved “strong and consistent positive” returns.
The second tranche of DBFO reforms has received strong support from superannuation funds and insurers, with a new class of advisers aimed to support Australians with their retirement planning.
