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Self managed super funds compliance

Ian Read, Assistant Deputy Commissioner of the ATO has delivered a speech on The SMSF Regulatory Environment which discussed the regulatory environment for SMSFs, upcoming rulings and determinations and what is on the ATO's "compliance radar".

He made it clear that ""the way the ATO administers the super and tax laws in relation to self managed funds includes:

• verifying whether a fund?s primary purpose is to pay retirement benefits to its members
• providing information and forms to help you and your clients set up and manage a fund
• implementing and maintaining systems to check funds comply with super laws
• taking enforcement action to correct matters when breaches of the law are detected, and
• checking that approved auditors perform their duties to the required standard.

If trustees make an honest mistake when trying to meet their obligations, individual circumstances will always be taken into consideration. However, trustees who fail to make a genuine effort to comply, or who deliberately set out to avoid meeting their legal obligations can face:

• losing their tax concessions
• being disqualified as a trustee
• administrative penalties, and
• being prosecuted.

The responsibilities of trustees include:

• making sure the purpose of their fund is to provide retirement benefits to the members
• preparing and implementing an investment strategy and making investment decisions with respect to super and tax laws
• accepting contributions and paying benefits (pension or lump sums) in accordance with super and tax laws
• ensuring an approved auditor is appointed for each income year
• undertaking administrative tasks such as lodging annual returns and record keeping, and
• making sure new trustees sign the Trustee declaration

The ATO's compiance effotrs this year will focus on :

• auditor contravention reports, mainly unrectified contraventions but also some rectified cases
• significant SIS Act contraventions, and
• new registrants, to build knowledge and enable early intervention.

Full post as published by Australian Regulatory Compliance Review on March 06, 2008 (boomark / email).