The ATO released “Self-managed super funds: A statistical overview 2009-10” earlier this year in April, and the report provides a warning of what trustees need to diligently avoid.
From the Contravention page –
As part of an annual audit, approved auditors are required to submit to the ATO Auditor Contravention Reports (ACRs) disclosing any SMSF contraventions according to ATO reporting guidelines. These range from administrative contraventions to more serious contraventions, such as breaches in relation to investments in in-house assets.
Overall, the percentage of the SMSF population with ACRs for the audit years ended 30 June 2004 to 30 June 2009 remained relatively stable at approximately 2% of all SMSFs each year.24
There were 8,792 SMSFs that had ACRs lodged containing 21,357 contraventions in the year ended 30 June 2011. This is an increase from 30 June 2010 of just over 8% in the number of SMSFs with an ACR, but a rise of almost 20% in contraventions. To 30 June 2011, just under half of contraventions are reported as rectified.
The most commonly reported contraventions continued to be loans or financial assistance to members (almost 21%), while in-house assets and separation of assets constitute almost 18% and 13% respectively. In monetary terms, these two contraventions represent almost 27% and just over 27% respectively of the reported contraventions up to 30 June 2011 (see appendix 1, table 23).
The demographic of SMSFs with ACRs generally align with the SMSF population. Analysis shows there is no correlation between the receipt of an ACR and the SMSF asset size, SMSF income range, years since establishment or the structure of the SMSF.