SMSF contraventions still an issue
Many self-managed superannuation funds (SMSFs) contacted by the Australian Taxation Office (ATO) about contraventions of their obligations fail to rectify the problems before they are followed up by tax officials.
The ATO’s confirmation of failures by trustees to rectify contraventions came at the same time as it announced that one of the most common breaches of the SMSF rules was now lending or financial assistance to members of SMSFs or their relatives.
“Loans or financial assistance to members or relatives are one of the most serious breaches,” the ATO said. “When these types of contraventions are followed up, the ATO has found in around 25 per cent of the cases the arrangement is not actually a loan and is considered early access,” it said.
The ATO warned that, in such circumstances, it would not only pursue action against the fund but would assess the trustees personally for the amounts involved and any tax liabilities they might incur.
On the question of SMSF trustees who fail to address contraventions raised with them by the ATO, the tax office said people who tried to avoid their obligations would face serious sanctions such as the loss of tax concessions for the fund, being disqualified as a trustee or even prosecution.
AUTHOR
Mike Taylor
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