Regulation of Self Managed Superannuation Funds by the ATO

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Self Managed Superannuation Fund issues on the Radar

The ATO has a number of issues on the radar which include

  • Overdue annual returns for a self managed superannuation fund
  • Individual taxpayers with a poor history of lodging tax returns and/or no or limited income who establish a self managed superannuation fund
  • Where there is no rectification of breaches identified in Audit contravention reports
  • Incorrectly claimed tax deductions when a fund is in pension mode
  • Non-compliance with pension rules
  • Non-commercial related party transactions or investments
  • Where there are significant changes in income or assets without an obvious reason that re inconsistent with the history of the self managed superannuation fund

Potential Breaches of the Sole Purpose Test

The ATO monitors the Self Managed Superannuation sector to ensure that the sole purpose test is adhered to by all funds and has identified some activities that may be of some concern

  • Loans to a self managed superannuation fund under a limited recourse borrowing arrangement that are not established correctly which includes but is not limited to the incorrect the registration of the owner or having other assets of the self managed superannuation fund being offered as security for the asset being purchased under a limited recourse borrowing arrangement
  • Where there is a promotion of an arrangement whereby the member gains a benefit from the self managed superannuation fund without having met a condition of release
  • The marketing of investment products where the focus is to tempt people to establish a self managed superannuation fund to invest in that product
Please note: All content has been sourced from the NTAA & issued by Leigh Barker West Pennant Hills. Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstance.
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