The ATO Tue 28.8.2012, released a Decision Impact Statement on the decision in AAT Case [2012] AATA 375, Re Pabian Park Pty Ltd Superannuation Benefits Fund and FCT.
In that case, the AAT set aside a non-compliance notice issued to an SMSF under s 40 of the SIS Act for regulatory breaches involving loans to a related party company. The AAT set aside the notice after ruling that the exercise of the Commissioner’s discretion under s 42A(5)(b) of the SIS Act would not be inconsistent with the objects of the SIS Act despite the contraventions. While the AAT found that the contraventions were “serious”, it said they were not “wilful” and the impact on the fund had not been significant as the loans had eventually been repaid (albeit late).
The ATO said the case was finely balanced and that it was open to the Tribunal to reach its decision based on the facts of the case.
The ATO noted that in reaching the decision, the Tribunal also accepted and followed the general approach set out in Practice Statement PS LA 2006/19 (SMSF – notice of non-compliance).
[LTN 166, 28/8]