When a LRBA is not at arm’s length
ATO / Limited Recourse Borrowing Arrangements / Professionals / SMSF / SMSF Compliance

When a LRBA is not at arm’s length

Non-commercial terms of a limited recourse borrowing arrangement for some time now have been acknowledged by the Australian Taxation Office (ATO) as schemes that will be subject to the non-arm’s length income (NALI) provisions in section 295-550(1) of the ITAA 1997.  This followed with practical compliance guidelines (PCG 2016/5) that set out ‘safe harbour’ terms for these … Continue reading »

Legislating on the run always costs more
ATO / Federal Budget / SMSF

Legislating on the run always costs more

With a lot of focus in the past 24 hours on the Government’s decision to not proceed with the $500,000 lifetime non-concessional contribution  (NCC) cap, it is frustrating to think about the wasted resources that have been deployed at the Australian Taxation Office (ATO) to support requests by individuals, tax agents and advisers as they feverishly obtained … Continue reading »

Early engagement with fund compliance breaches
ATO / Professionals / SMSF / SMSF Compliance

Early engagement with fund compliance breaches

The ATO has introduced a new service to centralise the way a fund trustee and professionals can notify the ATO of any unrectified fund compliance breaches. Where a fund has a contravention, it is has always been the case to encourage fund trustees to work with appointed professionals, including the SMSF auditor to rectify any issue … Continue reading »

Time for LRBA’s to swim between the flags
ATO / Limited Recourse Borrowing Arrangements / Professionals / SMSF / SMSF Compliance

Time for LRBA’s to swim between the flags

With the ATO having previously issued guidance on the application of section 295-550 of the ITAA 1997 – the non-arm’s length income (NALI) provisions applying to non-commercial limited recourse loan arrangements, we have now seen long-awaited guidance through Practical Compliance Guidance, PCG 2016/5 – Income tax – arm’s length terms for Limited Recourse Borrowing Arrangements established … Continue reading »

INFOGRAPHIC: Annual SMSF statistical overview
ATO / Statistics

INFOGRAPHIC: Annual SMSF statistical overview

The ATO has today published their annual statistical overview for the 2013-14 income year of the SMSF sector.  Along with the publication of the report, the Regulator has also created an infographic which provides a fantastic snapshot of the industry, that allows you to get a sense of not only the SMSF industry today, but a sense … Continue reading »

Related party loans result in trustee penalties
ATO / SMSF / SMSF Compliance

Related party loans result in trustee penalties

Related party transactions are the biggest problem when it comes to SMSFs.  Loans to members/financial assistance and in-house asset breaches account for more than 40% of all contraventions by SMSFs, representing 43.8% of the value of such breaches. It is this continued focus on related party loans and other similar transactions that is seeing the ATO take action through … Continue reading »

Is your SMSF electronic service address (ESA) active?
ATO / Professionals / SMSF / SMSF Compliance / Trustee education

Is your SMSF electronic service address (ESA) active?

It is estimated that more than 60% of SMSFs (300,000) receive employer contributions and need to be SuperStream compliant.  According to the ATO, more than 75% of all SMSFs have obtained an electronic service address (ESA) and are ready to received SuperStream contributions from their employer.  With small employers (<20 employees) required to comply by … Continue reading »

ATO’s about face a positive outcome for ECPI
ATO / Pensions / Podcasts / Professionals / SMSF

ATO’s about face a positive outcome for ECPI

Earlier this year, we saw the ATO appear to ‘move the goal posts’ when it came to applying exempt current pension income (ECPI) within a SMSF. This guidance provided by the Assistant Commissioner, stated two critical changes in calculating and reporting ECPI: to be exempt from an actuarial certificate, you must use the segregated method … Continue reading »

Taking the right steps to register your SMSF
ATO / SMSF / SMSF Compliance / Trustee education

Taking the right steps to register your SMSF

Earlier this year I wrote about changes to the registration process when an SMSF applies for an ABN and to become a regulated fund (see, why staple $5 to your new SMSF).  For an SMSF to be established, it must first have assets – this being a trust law principle.  This requirement must be demonstrated when … Continue reading »

The SMSF industry today
ATO / SMSF

The SMSF industry today

Much is being said about the changing dynamics of the SMSF industry. In a recent speech by the Assistant Commissioner, SMSF Segment, Matthew Bambrick, he shared some interesting insights into the growth and ongoing change of the SMSF sector.  I’ve decided to share some of these insights in the infographic below: Continue reading »