SMSF trustees should be aware that the Australian Tax Office (ATO) has intended to review more than 16,000 SMSFs before the year ends. Focus of this review is to ensure that SMSFs are compliant to their tax obligations and that SMSFs are not misused other than what it is intended for.
Trustees that started their SMSFs after June 2007 signed a trustee declaration ensuring that SMSF members are aware of their roles and limitations. SMSFs are only to be used for retirement, also known as the sole purpose test. SMSF trustees should ensure that their business records are in order to avoid any violations. The fund has to be regularly deliberated and verified to ensure that your SMSF is separate from any other form of assets. Fines are already in place for violators.
If you are unsure about the current status of your SMSF, it is advised that you obtain appropriate advice. Following the regulations and getting help will ensure that your SMSF is spotless when a tax audit takes place.
Read more on the Financial Review website.