ATO takes off the gloves over SMSFs

Trustees of self managed superannuation funds have been warned by theAustralian Taxation Officethat it intends progressively moving beyond education to enforcement.

Australian Taxation Office deputy commissioner for superannuation, Mark Jackson told the first Annual Self-Managed Super Funds Conference in Sydney that the ATO has been reviewing its approach to “determine whether we need to apply a firmer hand”.

“But we are less inclined to allow experienced trustees to make mistakes,” he says.

Jackson says that while there has been a general improvement with respect to the administration of self-managed superannuation funds, a number of regulatory issues remain a concern.

This had led to hundreds of funds having been identified as having fallen short of requirements, with some being referred to theAustralian Securities and Investments Commissionfor prosecution.

Jackson says there is particular concern within the ATO with respect to related party transactions within the self-managed superannuation fund environment, with the area of most non-compliance being the separation of superannuation assets from personal monies.

“We have found in some cases assets in the name of trustees rather than the fund,” he says.

Jackson says the ATO will be issuing a compliance guide on self-managed superannuation funds in the near future.

In the meantime he says there are a number of issues of concern including whether a 100 per cent investment in real property represents a real product for the purposes of superannuation investment and where auditors are involved in the day-to-day running of self-managed superannuation funds.

Jackson says that notwithstanding the fact that there has been a rapid take-up of self-managed superannuation funds, with 3,300 funds being established last month, they are not for everyone and he is concerned at notions that they represent a ‘do it yourself’ option.