Two issues dominating voluntary disclosures


By Darin Tyson-Chan

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Since the introduction of the ATO early engagement and voluntary disclosure service for SMSF trustees, two issues have dominated notifications to the facility.

The service, launched in May, is aimed at providing greater support to trustees wanting to proactively engage with the ATO about compliance issues.

To date, over 50 per cent of disclosures the ATO has received have involved related-party loans and early access to benefits.

The regulator said it was pleased with the number of trustees who had collaborated with their advisers and already used the service to let it know about unrectified contraventions in order to formulate a rectification strategy.

However, the ATO reiterated the obligations trustees had in the two main problematic areas.

“As a trustee, you must ensure that the member has met a condition of release before you release any funds and check that the governing rules of your fund allow it,” the regulator said in a recent newsletter.

“You also can't lend money or provide direct or indirect financial assistance from your fund to a member or a member's relative.

“Loans made by your SMSF must be in the best interests of members and comply with your investment strategy.

“You should seek advice before entering into loan arrangements.”

Trustees and advisers were further encouraged to use the ATO service.

“It is in the best interests of trustees and advisers to use that service as soon as they do detect those issues because the willingness to engage with us is taken into account when we determine the level of enforcement action we will take and also the level of any penalties that might apply,” ATO superannuation assistant commissioner Kasey Macfarlane said.

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