Super trustees could be hit with $4k penalty

5 September 2019

Superannuation fund trustees could be hit by a $4,200 penalty as the Australian Taxation Office (ATO) focuses on auditing investment strategies, the SMSF Alliance warns.

The ATO has requested over 17,000 funds provide evidence their investment strategy meets the retirement objectives and cashflow requirements of the fund, especially those with 90% of more of its funds invested in a single asset class.

SMSF Alliance principal and SMSF specialist mentor, David Busoli, said this would give auditors a reason to pay more attention to the investment strategies of all other funds as well.

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“The ATO seem to be prepared to overlook breaches where funds have already been audited as the letter specifically states ‘Have your investment strategy ready to provide to your SMSF's approved auditor as part of your next audit’,” he said.

Busoli warned that if the auditor identified the fund had failed to rectify any non-compliance with the requirements it could result in a penalty.

However, Busoli has previously said that diversification had to be “considered” but did not mean it must be “achieved”.

“If it has been properly considered, and its absence justified, the rules are satisfied,” he said.

“The problem with some investment strategies is that they are little more than a regurgitation of the requirements, a statement that they have been considered and an asset allocation that is meaningless, such as 0% to 100% in any asset.”

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The ATO is good at fining people. It’s a great strategy to build wealth for retirement too. Well done, bureaucratic muppets.

Rather than stick their nose where it doesn't belong, surely the resources of a taxation revenue collection agency is best served by doing what they are supposedly created to do; collect taxes and confine their investigations to those who do not pay their correct taxes.

The conspiracy theorist inside me says that this is part of concerted effort to make all forms of alternate superannuation arrangements, other than union industry funds, too difficult for the average person or for professionals to advise. Planners, accountants, trustees have all suffered a sustained ongoing attack since the prior Labor Gov was in, and clearly the agenda they set has not been altered. Whether this is by ineptitude, ignorance or intent of the current Lib Gov is anyone's guess.

Turnbull was a Fabian elitist and the Libs are still paying for the wrenching to the Left he took the party.

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