More SMSF members accessing funds without meeting conditions: ATO
The ATO said it is seeing a rise in behaviours which indicate SMSF members may be accessing their funds before meeting the conditions of release.
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“For instance, there has been an increase in the number of SMSFs not lodging their annual returns and in the reporting of regulatory contraventions involving loans to related parties, in-house assets and breaches of the payment standards,” the Tax Office said in a statement.
“For those new to the system a key indicator of illegal early release relates to SMSFs that fail to lodge a return in their first year of operation.
“This figure has increased from approximately 3000 for the 2019 financial year to around 5400 for the 2021 financial year. For those lodging and being subjected to an independent SMSF audit, loans and in-house assets account for the highest proportion of contraventions reported in auditor contravention reports at around 19 per cent and 17 per cent respectively.
However, the SMSF Association said it was not aware of the increase.
“We are not aware of the exact reasons why the ATO are experiencing an increase in super money being accessed before a condition of release has been met but we fully support the ATO’s compliance approach,” said Peter Burgess, CEO of the SMSF Association.
“It’s important SMSF trustees understand the preservation rules and that they do not access their retirement savings before they are legally able to do so. It’s important they understand their obligations as an SMSF trustee which also includes the requirement to lodge an annual return with the ATO by the required due date.
“The ATO’s recently released fact sheet on illegal early access provides a very useful summary of the preservation rules, and we encourage SMSF practitioners to make this publication available to existing and prospective SMSF trustees.”
The fact sheet Illegal early access to super | Australian Taxation Office (ato.gov.au) warns people of the consequences of accessing their super before meeting a condition of release.
Keeli Cambourne
24 March 2023
smsfadviser.com
smsfadviser.com
