The ATO monitors the SMSF industry continuously to ensure that funds are paying the correct tax and that their sole purpose is to meet members’ retirement income objectives. At an address in Sydney Thur 17.7.2014, ATO Assistant Commissioner SMSFs, Matt Bambrick, said areas of concern to the ATO for this year include:

  • The use of dividend washing. In March 2014, the ATO sent self-amendment letters to about 2,000 SMSFs (38% of which were in pension phase) it identified as potentially having implemented this arrangement.
  • The ATO is “keeping an eye” on promoters who advertise questionable SMSF conferences in overseas destinations.
  • The ATO has identified a potential home loan unit trust arrangement which involves the purchase of a residential property by a non-geared trust whereby units are purchased by the SMSF, related family trust and SMSF members.
  • Dividend stripping – the ATO is examining a retirement planning arrangement that involves a private company with retained earnings distributed by way of a franked distribution to an SMSF in circumstances where the SMSF is entitled to a refund in relation to the franking credits attached to the distribution.

[LTN 136, 17/7/14]