Tax Office 2011-12 Compliance Program – SMSF focus

On 30 June 2011, the ATO released its 2011-12 Compliance Program, highlighting the compliance issues attracting ATO attention and what it is doing to address them. The program covers individuals, micro businesses, SMEs, large businesses, tax practitioners, superannuation, promoter penalty laws, and non-profit organisations.

In relation to self-managed superannuation funds (SMSFs), the Tax Office said its compliance activity will focus on newly registered SMSFs; funds lodging their first annual return (to check if they are entitled to receive a “notice of compliance”); auditor contravention reports; related-party investments (especially the prohibition on lending to members and the 5% in-house asset limit); exempt current pension income; non-arms length income; re-reporting of contributions; and compliance with excess contributions tax release authorities. Where appropriate, the Tax Office said it will apply non-tax shortfall penalties to cases where it identifies incorrect fund reporting. Where a SMSF has repeatedly not lodged a return, the Tax Office may issue assessments with penalties based on the information available and could also make the fund non-complying, the Commissioner said.