ATO figures show jump in starting balances for SMSFs
The ATO’s statistical overview of SMSFs for the 2016–17 financial year indicates that funds that were established that year had assets of just over $500,000 on average, a substantial increase from the previous year.
The ATO has released an annual overview of the key statistics for the SMSF sector for the 2016–17 financial year, based on 2016–17 SMSF annual returns.
The overview indicates that at 30 June 2017, SMSFs had assets of just over $1.2 million on average, an increase of 10 per cent over the previous year and 27 per cent over the previous five years.
“Average assets per member grew to $652,000 at 30 June 2017, an increase of 11 per cent over 2016 and 29 per cent over the previous five years,” the ATO stated.
The ATO figures also showed that the average amount of assets held by SMSFs in the year they were established has been growing in the financial years to 2016–17.
“SMSFs established in 2016–17 had average assets of $521,000, an increase of 38 per cent from $379,000 for SMSFs established in 2015–16 and 54 per cent from $338,000 for those established in 2012–13,” the ATO said.
Use of service providers
The data for the 2016–17 financial year also showed that SMSFs used the services of around 5,600 SMSF auditors and 13,600 tax agents.
The figures indicated that 52 per cent of SMSF auditors performed between five and 50 SMSF audits, while 28 per cent of SMSF auditors performed between 51 and 250 audits.
Five per cent of SMSF auditors conducted more than 250 audits, representing 49 per cent of total SMSF audits in 2016–17.
Almost all SMSFs used a tax agent to lodge their return, with 99 per cent of SMSFs using a tax agent to lodge their 2016–17 SMSF annual return.
Investment performance and asset allocation
In the 2016-17 financial year, the average return on assets for SMSFs was 10.2 per cent, a significant increase from the 3.1 per cent return in 2015–16.
“This is consistent with the positive 9.1 per cent investment performance by APRA funds and the trend of positive returns over the five years to 2016–17,” the ATO noted.
At 30 June 2017 SMSFs held 80 per cent of their assets in direct investments at 30 June 2017, compared with 20 per cent in indirect investments such as managed investments and trusts.
The top five SMSF investments were cash and term deposits, Australian-listed shares, unlisted trusts, non-residential real property and limited recourse borrowing arrangement (LRBA) assets.
At 30 June 2017, 9 per cent of SMSFs reported LRBA assets, increasing from 7 per cent in the previous year and from 3% in 2012–13.
Corporate trustee versus individual trustee
ATO data for 30 June 2018 shows that the majority of SMSFs now have a corporate trustee with 59 per cent using this structure.
“Eighty-one per cent of newly registered SMSFs in the three years to 30 June 2018 were established with a corporate trustee,” the ATO said.