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SMSF trustees will need to stay vigilant on compliance
With the tax office increasing its monitoring efforts for the sector over the next year, self-managed superannuation fund (SMSF) trustees will need to ensure they are getting appropriate advice to meet their compliance obligations.
That has been the call of the SMSF Professionals' Association of Australia (SPAA) following the commencement of the Australian Taxation Office's (ATO's) ‘Compliance in Focus' program.
The ATO stated that it expects to audit 1100 funds for income tax compliance and 15,100 funds for regulatory compliance over the next 12 months.
SPAA senior manager, technical and policy Jordan George said SMSF trustees should be aware that the tax office will be targeting prohibited loans, related party transactions, SMSF return lodgement and funds with a history of non-compliance.
"In this environment, SMSF trustees need to ask themselves ,are they getting the best possible advice, and if they aren't, is it worth risking their fund's complying status?" he said.
"Being made non-complying can severely damage trustees' retirement plans as their fund loses its superannuation tax concessions."
According to preliminary results from the ATO's compliance activities for 2012-13 (as at May 2013), over 9,000 funds were reviewed with 132 made non-complying due to serious breaches of their obligations.
Despite this, the ATO stated that reported breaches affected less than 2 per cent of all such funds, with 180 funds prevented from entering the system and 434 suspected funds removed from the sector.
"This confirms what SPAA has been saying — that the SMSF sector is a healthy, compliant and well-functioning sector of the superannuation industry, simply confirming what the Cooper Review stated in its final report in 2010," George said.
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