The ATO on Wed 12.11.2014, released a speech delivered by ATO Assistant Deputy Commissioner Superannuation, Stuart Forsyth, at the ICAA National SMSF Conference on 11 September 2014. Mr Forsyth provided an update on compliance activities and the regulation of SMSFs. Some key points made by Mr Forsyth include:
- Compliance activities – In the past year, the ATO undertook a little over 36,000 compliance activities. Mr Forsyth said there has been a decline in large scale illegal early release of super since the ATO introduced an automated risk assessment of trustees and a member verification process.
- ATO data on limited recourse borrowing arrangements (LRBAs) – Mr Forsyth said the ATO has improved its collection of data from SMSF annual returns on LRBAs; however, he said the data cannot distinguish which part of the increase in the number of LRBAs is due to growth in the use of LRBAs.
- ATO use of auditor contravention reports (ACRs) – Mr Forsyth said all ACRs trigger an assessment of the fund as either low-, medium- or high-risk. SMSFs rated as low-risk receive a letter advising that the matter is closed. He said the ATO usually assesses funds as low- and medium-risk within 8 weeks of the ACR being lodged.
- Private ruling requests re borrowing and related parties – Mr Forsyth said the ATO continues to receive private binding ruling requests in relation to LRBAs with related parties under non-commercial terms. He discussed one edited private binding ruling request released in April 2014.
[LTN 220, 13/11/14]