News

ATO

ATO to focus on loans in 2013/14

Magnifying glass.

SMSF loans face scrutiny.

The Australian Taxation Office (ATO) will focus a large part of its compliance activity on loans within SMSFs in the 2014 financial year.

“You might say why will there be a focus on loans? One of the reasons is, and assuming the law gets through around penalties, in a lot of loans cases you will have a continuing contravention and potentially an administrative penalty will apply from 1 July 2013,” ATO superannuation assistant commissioner Stuart Forsyth said.

“If you’ve loaned money to a member out of your fund, on our reading of the proposed law as it is currently drafted, you will have an administrative penalty obligation essentially that will arise from 1 July [2013] because it is a continuing breach.

“And those continuing breaches that go to the assets of the fund, particularly basic contraventions like that, are obviously always going to be one of our focuses.”

As part of the crackdown on SMSF loans, the ATO will be requesting that trustees correct the contraventions immediately and perhaps even asking whether or not they want to continue to operate a self-managed fund.

“I know that sometimes seems like a harsh message, but nobody actually has to have an SMSF and if you’re the sort of person who is going to commit ongoing contraventions, you need to be very careful,” Forsyth said.

“And not everybody in my experience is very good at keeping away from piles of money. Some people have a long and detailed history of using money out of partnerships and companies and just think of SMSFs as another bank account to use.”

He warned that in one case of a loan contravention the individual was actually sent to prison.

The actual number of ATO audits performed on SMSFs will, however, fall in 2013/14.

“We expect there to be more comprehensive audits next year. So fewer numbers but more depth,” Forsyth said.

Our Story

selfmanagedsuper is the definitive publication covering Australia’s SMSF sector. It uniquely offers both online and print publications tailored separately for SMSF professionals and individual trustees participating in the fastest growing and largest sector of the superannuation industry. As such, it is a must read for those wanting to stay informed about the latest news, regulatory developments, technical strategies, investments, compliance, legal and administration issues concerning SMSFs.

Copyright © SMS Trustee News 2018

ABN 43 564 725 109

Benchmark Media

Site design Red Cloud Digital