Common SMSF ‘stuff ups’ persist

Common SMSF ‘stuff ups’ persist

One lawyer has found the ATO’s chief compliance concerns are often centred on the same mistakes year in and year out, with basic “stuff ups” often having a significant knock-on effect. 

Although the sector is largely compliant with lodgement deadlines, a minority continue to miss key deadlines or fail to lodge at all, immediately raising a red flag with the tax office, said barrister at State Chambers, Ben Symons. On-time lodgement is, year in and year out, a headline item on the ATO's compliance watch list. 

On the grounds of independence concerns, the ATO continues to focus its compliance resources on auditors who prepare SMSF accountants and statements for SMSFs that they also audit, Mr Symons told delegates at a Chartered Accountants Australia and New Zealand event in Sydney.

Specifically, the ATO will undertake further scrutiny of a group of 92 auditors who act as both tax agent and SMSF auditor for a client.

Auditor independence has been a major area of focus for the ATO in the last few years, but issues still persist where firms have not been able to effectively separate their auditing work from their tax agent and related advice work with an SMSF client.

Mr Symons also warned delegates to be on the lookout for compliance with the new collectibles rules, which came into effect on 1 July last year. The ATO, very publicly, warned trustees on several occasions that it would take a hard line with regulating the use of collectibles, given a generous phase-out period from the old regime.

Trouble spots for trustees include insurance of the collectible which must be in the fund’s name. Further, storage or display of the collectible cannot be on the premises of a related party – this is something to pay particular attention to if your clients are holding artworks in their SMSF.

Death benefit nominations, especially in light of the superannuation reforms, could also put professionals in the firing line of unhappy beneficiaries if not appropriately executed.

Mr Symons stressed that care should be taken to comply with a client’s trust deed when completing a nomination form, because the nomination may otherwise not be binding if errors are made in this process.

Common SMSF ‘stuff ups’ persist
smsfadviser logo
promoted stories

SUBSCRIBE TO THE SMSF ADVISER BULLETIN

News

Strategy