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What are SMSF trustees getting wrong? 

November 2014

The Australian Tax Office has released its 2013/2014 annual report which shows what level of enforcement action has been undertaken over 12 months, pinpointing the compliance issues it will focus on in the coming year. 

Non compliance the main issue
It seems that while compliance is improving, there are still substantial issues for SMSF trustees not meeting their obligations. Compliance with SMSF rules can be quite complex, however the ATO has made it pretty clear that it is enforcing compliance quite firmly. 

So what are SMSF trustees getting wrong? 
  • Non-compliance with SMSF rules (37,000 compliance activities
  • Not making their lodgements on time. (22,000 SMSFs with two or more overdue lodgements were withheld from the Super Fund Lookup service, making them unable to accept rollovers or new contributions until they were brought up to date).
  • Exceeding contribution caps (66,000 assessments) 
What is the ATO focused on in 2014/2015?
The ATO will be targeting SMSFs that have outstanding annual returns as well as a continued focus on limited recourse borrowing arrangements, given how popular property investment has become for SMSFs. The value of property inside SMSFs was estimated at $8.7 billion, which is a significant change since 2012. 

Watch those excessive contributions
If you accidentally over pay your contributions to your SMSF, there's a sting in the tail if you try to get the excess or any earnings on it released from the fund. Under proposals being put forward, the intent is to include withdrawal of excess contributions as part of your individual income tax assessment among a raft of other changes. 

Get advice early
If you're setting up an SMSF or struggling with compliance, then speak to you advisor. It's important to ensure you understand your obligations as an SMSF trustee. Call us on 02 9957 4033 for guidance on the tax implications of your SMSF structures. 

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Last updated November  2014. This article is provided for information purposes only and should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.

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Disclaimer

This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.

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