SMSFs under Cooper Review spotlight
Investments in collectables and personal-use assets would be banned, stricter rules around in-house assets would be introduced and there would be firmer regulation of self-managed super funds (SMSFs) under proposals made by the Government review into the sector.
The chairman of the review, Jeremy Cooper, yesterday released his preliminary report into the SMSF sector.
The review panel wanted to see investments in collectibles such as artworks, wine collections, exotic cars and yachts prohibited. The acquisition of in-house assets would also be restricted, while rules around how SMSF trustees and members could transact with related parties would also be tightened.
Other proposals include improving the competence and independence of approved auditors and tightening the SMSF registration process. This would see the introduction of member identity requirements, which the panel hoped would reduce instances of fraud and illegal early release schemes.
Under the proposed changes, the penalty regime administered by the Australian Taxation Office would be made "more flexible to enable more effective and equitable regulation".
"Whichever way we look at it, SMSFs are here to stay, but we want them to focus more on investing for retirement savings, rather than related party transactions, collectables and leverage. Most SMSFs already do this, so the vast majority of SMSFs will not be affected by these particular proposals," Cooper said.
The report dismissed the proposal that SMSFs should have a minimum asset size. While the review panel "remains concerned about the number of small-sized SMSFs, it acknowledges that their existence is generally due to the conscious choice of members".
The panel also supported trustees keeping control of their SMSFs, rather than requiring third party custodians to hold SMSF assets.
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