NEWS – New Audit Information required on SMSF Tax Returns

NEWS – New Audit Information required on SMSF Tax Returns

New Audit Information required on SMSF Tax Returns

New mandatory audit information will be required for the first time from this year. SMSFs completing their annual return will need to include mandatory auditing information, which up until now was only required in limited circumstances.

Hrishikesh Joshi at Self Managed Super website, writes –

Smarter SMSF chief executive Aaron Dunn said SMSFs will now be required to complete both Part A and B qualifications in the SMSF annual return (SAR), instead of only Part B as has been the case in the past.

Dunn described the change as the “biggest shift” in reporting for the 2019 SAR, adding Part A will have focus on the financial audit and require an auditor to form an opinion as to whether the financial statements of an SMSF are a fair presentation of the financial position of a fund for that income year and the results of its operations.

“As a result, the auditor needs to be satisfied through obtaining evidence that supports the assets and liabilities of the fund,” he said in a blog post on the Smarter SMSF website.

“This can include correct ownership of fund assets, ensuring that fund assets are valued to their market value using the valuation guidelines provided by the ATO or according to relevant accounting standards.”

He pointed out Part A of the audit report has become more important since 1 July 2017 as a result of the introduction of the transfer balance cap for retirement phase and a member’s total superannuation balance (TSB), which impacts on a variety of measures such as contributions and how a fund may be able to claim an earnings tax exemption.

In the past, funds have been required to report qualifications to Part A of the audit only where the auditor could not verify the existence of a fund asset without a physical inspection or where the fund invested in assets where the value of recoverability could not be determined without formally valuing the entity or having it audited.

The latest SAR changes also include a new labelOutstanding Limited Recourse Borrowing Arrangement (LRBA) Amount – which has been added to sections F and G of the SAR to report outstanding limited recourse borrowings for each member.

Dunn said there was no point in a fund adding this data to the report as the reasons for its inclusion had not yet passed into law.

“This information was to assist the ATO in calculating a member’s TSB for any new LRBAs that were entered into from 1 July 2018 – effectively adding any outstanding loan balance to determine a member’s TSB,” he added.

The proposed measure, however, lapsed when the Treasury Laws Amendment (2018 Superannuation Measures No 1) Bill 2018 did not pass both houses of parliament before the recent federal election.

“Therefore, at this time the data within label Y has no relevance for the completion of the SMSF annual return,” Dunn said.

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About SuperBenefitnews

Self-Managed Superannuation Service Providers in Australia. SuperBenefit provides a wholistic SMSF assistance, education and administration service continuum - 1. “assistance” is help of whatsoever nature where our overall SMSF experience and knowledge enables us to provide assistance/help without any legal (or “license”) limitations. 2. “education” involves providing knowledge through teaching, coaching and mentoring about all matters SMSF, including (but not limited to) investment issues such as equities and property, 3. “administration” encompasses all admin aspects of legally required SMSF trustee and member record keeping including (but not limited to) audit and ATO matters. In keeping with our key point that SuperBenefit does not provide Financial Advice, where issues arise from 1, 2, and/or 3 above Indicate a need for a legally authorized provider (such as a Financial Adviser) and the client does not have their own service provider, the client can utilize SuperBenefit’s ‘Connect Assist’ … SuperBenefit, in itself, does not provide Financial Advice, but it does provide the wherewithal for great SMSF service. WE do not provide Financial Advice or any other service that requires a legally authorized provider. However, where such advice or service is required we have our ‘Connect Assist’, a SuperBenefit resource we use to connect clients to a Licensed Advisor or other legally authorised service provider. Call us 0407 361 596, no obligation FREE Connection call to see how we can help you!
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