SMSF trustees cautioned on ATO approach
The Australian Taxation Office's (ATO's) broad-brush approach to self-managed superannuation funds (SMSFs) this financial year is likely to generate an upturn in audit activity, according to specialist law firm Hall and Wilcox.
In an analysis of the ATO's compliance program for 2012/13, Hall and Wilcox pointed to the fact that the Commissioner of Taxation expected to issue 29,000 excess contributions tax assessments and 30,000 refund of excess contribution offers where the concessional cap has been exceeded for the first time and the excess amount is not more than $10,000.
It said the ATO would also be confirming that SMSF trustees comply with compulsory release authorities.
"This broad brushstroke approach is targeting the main areas of superannuation tax compliance and is likely to generate increased audit activity in the superannuation industry," the Hall and Wilcox analysis said.
The law firm also noted that, for the first time, the Commissioner of Taxation would be reviewing the top 200 SMSFs based on total assets and on a tax and compliance analysis before selecting 25 funds for a comprehensive audit.
The law firm said the ATO also intends to target 1500 fund trustees that have failed to lodge an annual return - something which would put the spotlight squarely on fund trustees that fail to lodge to avoid a breach of the superannuation law from being discovered.
"However, it will also target otherwise complying funds that are simply late in lodging their annual return," the analysis said.
"Approximately 100 fund trustees will be approached by the Commissioner of Taxation regarding non-arm's length transactions," it said. "We recommend trustees ensure that they receive independent valuations on all assets being bought, sold or leased to substantiate the market value and that all transactions are undertaken on a commercial basis and properly documented."
Recommended for you
The financial services technology firm has officially launched its digital advice and education solution for superannuation funds and other industry players.
The ETF provider has flagged a number of developments as it formally enters the superannuation space through a major acquisition.
While all MySuper products successfully passed the latest performance test, trustee-directed products encountered difficulties.
Iress has appointed Insignia Financial’s former general manager of master trust and insurance products as its newest CEO of superannuation, who will take over from Paul Giles.
