ATO identifies SMSF contravention red flags

The ATO has identified certain red flags and problem areas with SMSFs that will attract its attention, ahead of tax time 2019.

         

 

ATO assistant commissioner Dana Fleming said that the ATO received a total of 16,909 regulatory contraventions for 8,215 SMSFs in the 2018 financial year.

This financial year so far, there have been 8,412 regulatory contraventions for 3,549 SMSFs.

“The most common contraventions are related-party loans, loans to members, in-house assets, investing in related-party assets and separation of assets where members are not keeping their personal assets separate from the assets of the SMSF,” Ms Fleming said.

“Together, these top three account for more than 50 per cent of the contraventions reported to us and are the common repeated contraventions that we see.”

Contraventions relating to loans accounted for 21.1 per cent, in-house assets accounted for 18.7 per cent and failure to keep assets separate represented 12.8 per cent.

While the highest number of contraventions were for related-party loans, the contraventions relating to in-house assets and separation of assets represented the greatest value, she said.

“Contraventions also revolved around growing wealth in the SMSF environment and trying to access the low tax rate. Poor record-keeping is often a culprit here,” she said.

Some of the other contravention categories listed by the ATO related to administrative errors, sole purpose breaches, borrowings, operating standards and acquisitions of assets from related parties.

The main drivers of these contraventions, she said, tend to be financial stress and the ease of accessibility with SMSFs in terms of accessing assets and dollars and poor record-keeping to substantiate transactions.

In the 2017–18 financial year, there were a total of 257 trustees disqualified, Ms Fleming said. Enforcement actions including direction to rectify, enforceable undertakings and notice of non-compliance were taken for 180 trustees.

In this financial year so far, 75 trustees have been disqualified, she said.

 

Miranda Brownlee
01 March 2019
accountantsdaily.com.au

 

More Articles

Treasurer unveils design details for payday super

  The government has released further details about the design of its payday super policy including an...

Read full article

Government releases details on luxury car tax changes

  The draft legislation aims to modernise the luxury car tax by tightening the definition of a...

Read full article

Are you receiving Personal Services Income?

  Do you earn personal services income (PSI)?   . While most people may think that it only...

Read full article

Taxing unrealised gains in superannuation under Division 296

  Australia’s superannuation system has seen a number of significant changes in recent...

Read full article

The Leaders Who Refused to Step Down 1939 – 2024

Check out the The Leaders Who Refused to Step Down 1939 ...

Read full article

Investment and economic outlook, September 2024

The latest forecasts for investment returns and region-by-region economic outlook. . A recent rapid...

Read full article

ASIC extends reportable situations relief and personal advice record-keeping requirements

ASIC has extended the reportable situations relief and personal advice record-keeping requirements on the same...

Read full article

Economic slowdown drives mixed reporting season

Many Australian companies are still battling economic crosswinds and headwinds.   . Hundreds of...

Read full article

Sofie Korac is an Authorised Representative (No. 400164) of Prudentia Financial Planning Pty Ltd, AFSL 544118 and a member of the Association of Financial Advisers.

Financial Advice Sydney and the North Shore Office based in Gordon NSW

Financial Services Guide - Disclaimer & Privacy Policy

^