The Australian Taxation Office (ATO) will be focusing its attention on related party transactions in relation to its compliance programs for the SMSF sector over the coming 12 months.
"I have a view that most people will not have a contravention in their fund unless they have a related party transaction," ATO assistant commissioner superannuation Stuart Forsyth said.
"It's hard to see how you can have a significant contravention in a fund other than perhaps some of the more technical things unless you have a related party transaction," he added.
"The types of contraventions that result in funds being made non-complying are almost always related party transactions like taking the money out when you're not supposed to, and lending 100 per cent of the funds to a related business. They're the sorts of things that make it very hard as a regulator to give people permission to fix and often they can't be fixed."
A specific area that will be targeted is the lending of money to relatives or members of the fund, as they are the two most reported contraventions of SMSFs.
According to Forsyth, trustees have no real excuse for making errors in this area as the law governing these arrangements is unambiguous.
"You cannot use the resources of an SMSF to lend money or provide direct or indirect financial assistance to a member or relative of a member," he said.
To police this area, the ATO plans to perform 300 audits and 1000 reviews throughout the coming year.
"That's 1300 direct contacts. We've also planned another 1200 mail-outs and a follow-up program from the previous year's tailored advice programs," Forsyth said.
When investigating trustees who have breached the in-house asset rules, the ATO usually targets SMSFs that have comfortably exceeded the 5 per cent rule.
