Trustees and auditors of self managed superannuation funds (SMSF) should be cautious when moving assets other than cash into a SMSF, the Australian Taxation Office (ATO) has warned.
SMSF trustees must ensure the fund accurately reports the market value of the non-cash asset, as well as consider any other relevant taxation or superannuation regulatory issues which may apply.
The ATO is concerned about certain transactions which are designed to manipulate contribution limits, according to tax commissioner Michael D’Ascenzo.
“We are concerned about contributions of assets made to a fund where the market value of the asset is not properly accounted for, in an attempt to avoid paying excess contributions tax,” he said.
“It is also of concern that people may try to avoid the excess contributions tax by paying expenses on behalf of their fund or by making improvements to a fund asset without reimbursement for the work.”
The ATO will be following up on excess contributions and SMSF trustees who exceed the cap can expect to receive an excess contributions tax assessment, D’Ascenzo said.
“People also need to consider any income, capital gains and fringe benefits tax implications when transferring assets.”
The ATO plans to issue further guidance on the issues around non-cash superannuation contributions.
