Verante Financial Planning adviser Liam Shorte says the ATO is calling prospective trustees and asking them why they want to set up the SMSF and who recommended it.
“They’re looking for applications that are at risk, so applications where there may be issues, and they’re looking to talk to the trustees and ask them a range of questions to see why they’re setting up the trust, who’s recommended it to them, and just making sure that they understand their duties,” Mr Shorte said.
The ATO is also checking that prospective SMSF trustees fit within certain criteria by checking records such as their tax history.
“They’re also looking at the accountant’s records as far of their history with members with things like late lodgements, so that’s some of the criteria they’re using to target their resources,” Mr Shorte said.
Mr Shorte said this could be part of ASIC’s plans to crack down on SMSF establishments, where they’re inappropriate for individuals, which were flagged earlier this year.
“If the ATO isn’t happy with these responses, they pass the information across to ASIC as well, so they are data sharing the responses,” he said.
“It’s not a bad idea, it just means that advisers need to make sure that they are talking to their client, that if it’s a husband and a wife, that they both understand the reason for setting up the super fund, and that they have access to educational resources.”
why don’t people just respond “it’s none of your bloody business”
A self-managed fund doesnt mean that trustees are on their own or that they have to do everything for themselves.
If prospective trustees choose to not comply with their tax obligations, what confidence is there that they’ll comply with super law? If trustees have less than a perfect compliance history, and they’re unable to demonstrate how they’ll operate the fund, I think it’s more than reasonable of the ATO to be asking pointed questions and withholding the fund’s ABN if necessary.
Fully complying and knowledgeable taxpayers who wish to be a trustee of their fund have nothing to fear.
So now bureaucrats decide whether or not you can have an SMSF. Forget freedom of choice. Forget individual freedom to organise your own affairs. Franz Kafka got it right after all.