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| Michael D’Ascenzo |
The Australian Taxation Office (ATO) has chosen to highlight a recent Administrative Appeals Tribunal decision upholding the ATO’s approach to taking action against self-managed superannuation funds (SMSFs) that contravene in-house asset rules.
The Commissioner for Taxation, Michael D’Ascenzo, pointed to the AAT decision, which supported the position that once a fund is found to be non-compliant it loses access to concessional tax treatment, with the result that its taxable income is assessed at the top marginal rate.
He said the decision ought to be interpreted by trustees as a reminder to act on any breaches.
D’Ascenzo said the ATO had increased its focus on ensuring high levels of compliance among trustees given the important role of SMSFs and their access to concessional tax treatment.
The AAT decision related to the trustees of a SMSF that breached the in-house asset rules after loans were made to a related company to support its business activities.
The company failed to repay the loan until four years later, two years after the fund’s auditors reported the breach to the trustees and the ATO.
