The Small Independent Superannuation Funds Association (SISFA) has called on Treasury to reconsider making any amendments that will introduce stricter rules governing investments in collectables and personal assets by self-managed superannuation funds (SMSF).
"Existing legislative and administrative provisions already operate effectively to ensure that the making and holding of investments by SMSFs in collectables and personal use assets are for retirement income purposes," SISFA chair Michael Lorimer wrote in the professional body's latest newsletter.
"Compliance with these provisions is a primary obligation of trustees and is then also subject to the approved auditor review process. Contraventions can lead to a number of possible consequences, ranging from rectification action to penalties imposed by the ATO (Australian Taxation Office)."
In particular, SISFA is concerned that any unnecessary changes to the rules might result in an increase in the cost of running an SMSF as well as an increase in the complexity of investing in these types of assets.
In addition to these particular potential outcomes, SISFA believes any changes will not definitely translate into an improvement in the existing regulatory framework.
While the industry body's stance is against changes to the legislation, it has stipulated that if amendments to the rules are made, they will have to apply to the wider superannuation landscape and not just SMSFs.
"Small APRA (Australian Prudential Regulation Authorirty) funds (SAFs) should also be included, as members of such funds are in a similar position to SMSF beneficiaries in that they too can have direct input into or control over their superannuation savings, albeit the trustee is an independent APRA-regulated entity," Lorimer said.
SISFA's submission to Treasury comes in response to a general invitation for comment on the Exposure Draft of Tax Laws Amendment (2011 Measures No 2) Bill 2011. Schedule 2 of the exposure draft is a proposal for the ability to change the Superannuation Industry (Supervision) Act to implement stricter standards governing investments in collectables and personal assets.
