Using this service, potential product providers to trustees could apply to the ATO for a ruling to determine whether the product they were designing was sound from a legislative perspective, Cavendish’s SMSF specialist mentor David Busoli told SMSF Adviser.
However the service, which was formed five years ago, was never used. Mr Busoli suggested this may be because the ruling system was non-binding, meaning the commissioner could retrospectively withdraw a favourable ruling at any time.
“If it’s non-binding, what actual use is it? [This] seems to me to be a prime example where well-meaning bureaucrats put together a service devoid of any real commercial application,” Mr Busoli said.
“It would be a very courageous product provider indeed that would go to all that effort for something which could be taken away so easily,” he added.
While the ATO believes there are sufficient facilities in place for SMSF product providers to be certain their product is sound from a legislative perspective, Mr Busoli believes there is room for improvement.
“It would’ve been better had they introduced a situation where there was more certainty – that would’ve been used and I’ve no doubt it would’ve been welcomed,” Mr Busoli said.
“I personally would prefer it if there was a straight through system, a well-established [system] with certainty up front,” he added.