The Australian Taxation Office (ATO) has identified the four most common breaches made by SMSFs and they’re outlined in the table below.
|Type of legislative breach||As a % of number of breaches|
|Breach relating to financial assistance provided to a member||21.3%|
|Breach relating to in-house assets (sole-purpose test)||18.7%|
|Breach relating to administration obligations||11.3%|
|Administration separation of assets||12.8%|
Source: Australian Taxation Office (ato.gov.au)—Types of contraventions reported to the ATO, December 2013.
One of the most common breaches relates to in-house assets and the sole purpose test. Every SMSF must comply with the sole purpose test. That means the fund must be run for the sole purpose of providing superannuation benefits for members in retirement (or for member’s dependants if the member dies before retirement).
That means, any asset—for example, artwork or an investment property—purchased by an SMSF cannot be used by any member or his/her family in any way before retirement.
Who can help me meet my SMSF obligations?
It can be challenging to ensure that every aspect relating to the running of your SMSF complies with superannuation law.
If you’d like to speak with us about the ways we can help you manage your fund’s administration and compliance obligations, call 131 267 Monday to Friday from 8am to 8pm and Saturday and Sunday between 9am and 5pm AEST.