SMSF update from the ATO

In a recent speech, Alison Lendon, Deputy Commissioner Superannuation, spoke to a number of issues that affect super funds and their trustees and advisers. The following are excerpts:

Applying to the ATO for advice

If trustees of superannuation funds want a written explanation of the ATO’s view on how the super laws apply to their SMSF, they can apply for ‘SMSF specific advice’.

While this advice isn’t legally binding, it will provide certainty to trustees about the application of the super laws to their fund, and the fact that trustees acted in accordance with the advice would be an important factor in their favour. We can assist with this application process.

The most common topics the ATO is asked about for specific advice are:

  • confirming when a property meets the requirements to be ‘business real property’, and working through the acquisition of business real property from related parties;
  • understanding the limitations of investing in related unit trusts;
  • what’s an ‘improvement’ or a ‘repair’ to property acquired under a limited recourse borrowing arrangement (LRBA);
  • the acquisition of assets from related parties and low-interest loans for LRBAs; and
  • requests about collectable and personal use assets since specific requirements regarding their storage and usage were introduced in 2011, especially regarding insurance and gold bullion.

Related party transfers

From 1 July 2013, new legislation will broaden the types of assets currently prohibited from being acquired from a related party, but will also provide more transparent exceptions whereby acquisitions will be permissible.

By way of example, the acquisition of ‘business real property’ will be prohibited unless acquired at market value as determined by a qualified independent valuer. Similarly, listed securities acquired from a related party will also be prohibited unless they are acquired in a way that is prescribed under the regulations. The legislation will also introduce a prohibition on the disposal of SMSF assets to a related party, unless similar exceptions are satisfied.

For more information

For more information regarding this article or its contents, please contact Alex Mineeff from Taxable Accounting on 02 8883 4016.

Alex Mineeff formed Taxable Accounting, to provide professional accounting, taxation, auditing services to individuals and small businesses. Alex is a Certified Practising Accountant (CPA), registered auditor, and is a member of a number of professional bodies, including Australian Society of CPA’s, National Taxation & Accountants Association, and the Taxpayers Association. Alex is also an active member of both the Rotary Club of Norwest Sunrise and the Hills Chamber of Commerce.

Alex Mineeff
Taxable Accounting
208A/Level 2
Skycity, 20 Lexington Drive
Bella Vista NSW (Norwest Business Park) 2153

Telephone: 02 8883 4016
Facsimile: 02 8824 5274