POWERED BY MOMENTUM MEDIA
ATO focus on SMSFs as lines of credit
The Australian Taxation Office (ATO) has its eyes on self-managed superannuation fund (SMSF) trustees who are using their funds as a line of credit rather than saving for their retirement.
The ATO’s assistant commissioner for SMSFs, Stuart Forsyth, used a speech to a Small Independent Superannuation Funds Association audience earlier this month to warn trustees against using their funds in this way. He referred in particular to one instance in which a SMSF trustee was suffering health problems while also experiencing difficulty in their business. At one stage during this period, the trustee’s fund lent 95 per cent of its assets to a related company.
The ATO was alerted to the breach by an auditor, Forsyth said. He said as the trustee made no effort to rectify the breach, the fund lost its compliant status and its concessional tax treatment.
The trustee later applied to the Administrative Appeals Tribunal (AAT) to reverse the ATO decision, but was ordered to repay the loans.
“However, the trustees made other investments instead of repaying the funds and, in fact, took four years to repay the loans,” Forsyth said.
He said the behaviour of the trustees suggested they were using their SMSF as a line of credit rather than saving for their retirement.
“It has been our constant message to all SMSF trustees that they must treat their fund and any business they are involved in as being quite independent of each other. The AAT agreed with us on this issue,” Forsyth said.
AUTHOR
Mike Taylor
Recommended for you
The impact of identity theft and its threat to superannuation savings were highlighted in a case that went before the Federal Court at the end of 2023.
A recent NSW Supreme Court decision is an important reminder that while super funds may be subject to restrictive superannuation and tax laws, in essence they are still a trust and subject to equitable and common law claims, says a legal expert.
New research from the University of Adelaide has found SMSFs outperformed APRA funds by more than 4 per cent in 2021–22.
The SMSF Association has made a number of policy recommendations for the superannuation sector in its pre-budget submission to the government.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.56 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.06 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.81 3 y p.a(%)
