ATO reviews approach to SMFSs as popularity grows

The ATO have announced that there will be a heavier focus on working with trustees of SMSF’s and their advisers to improve compliance with the governing rules and regulations, and to prepare the SMSF industry for regulatory changes that may take effect next year. The government has proposed legislation which will give the ATO new powers to address non-compliance by SMSF trustees, and if the legislation is adopted, administrative penalties will apply to compliance breaches from 1 July 2014. This will result in SMSF trustees being personally liable for penalties between $850.00 and $10,200.00, depending on the provision contravened. Loans, borrowings, sole purpose breaches, in-house assets, arms-length and related party investments are the most common contravention auditors are reporting. This year the ATO will review every Auditor Contravention Report, and the ATO strongly encourages SMSF trustees to rectify any contravention as soon as possible.