ATO GETS TOUGH OVER SELF MANAGED SUPERFUNDS

A recent case has been decided which highlights the importance of administering your fund responsibly and in accordance with the relevant requirements.

In summary there was a husband and wife fund with total assets of $123,000.  They also owned a separate business which was experiencing some financial difficulties.

The fund lent the company numerous amounts of money over a number of years.  The loan was subject to interest at a rate of 10%.  At various times over a number of years the fund lent the company almost all of its assets.

Whilst the loans were repaid including the 10% in interest, the fund was found in breach as the loan was an in house asset which exceeded the total of 5% of total assets prescribed.

The commisioner issued a notice which was confirmed on appeal that the fund was no longer  a complying fund.  As a result the fund lost 48.5% of its assets.

As the ATO becomes more active in this area, it is now more important than ever to ensure compliance with all legislative requirements.

Should you be unsure of any action which you may be considering within your self managed superannuation fund, please discuss this with your C & W Advisor.