The Australian Tax Office (ATO) has stated that they will continue to target people that deliberately (or unintentionally) misuse the concessional tax environment of self-managed super funds (SMSFs).
The ATO believes that the increasing amount of retirement wealth invested through self-managed funds is attracting a greater number of fraudulent schemes. Many of them are extremely well put together but usually promise unrealistic returns. The ATO is improving its vigilance and working closely with APRA, the Australian Securities & Investments Commission (ASIC) and the Australian Crime Commission (ACC) to improve detection of the illegal schemes.
The ATO monitors registrations of self-managed funds using the Australian Business Register (ABR). If the ATO considers a fund in its first year is highly likely to operate incorrectly, they will remove its lodgement concession. This means the fund must lodge by 31 October, and the ATO will follow up to ensure the fund lodges by that date. The ATO will not issue a notice of compliance until after the fund has lodged its first annual return and they are satisfied that the fund is operating correctly.
Trustees of SMSFs should be aware that, making investments that are not eligible for the concessional tax rate or incorrectly reporting information will put them in breach of their obligations and have the ATO on their backs very quickly.