Tax Commissioner Michael D’Ascenzo today warned trustees of self-managed super funds (SMSFs) about people offering to set up agreements between funds and related parties to purchase assets, particularly properties.
“We’re concerned about arrangements being offered to trustees that breach the in-house asset rules,” Mr D’Ascenzo said.
“These arrangements use a paid third party to set up an agreement, sometimes referred to as ‘a joint venture agreement’, between the fund and a related trust to purchase an asset that provides income for the trust and the fund.
“This is clearly an attempt to circumvent the in-house asset rules as the transaction is really an investment by the SMSF in the related trust.
“This alert serves as a timely reminder to trustees that we are looking closely at SMSFs to ensure they are meeting their obligations in relation to loans, in-house assets, borrowings and non-arms length transactions.”
More information
Taxpayer alert 2009/16 is available from the Tax Office website www.ato.gov.au/atp
The draft self managed super fund ruling SMSFR 2008/D5 clarifies what is considered an in-house investment and is available on the Tax Office website or by phoning 13 10 20.
More information on in-house asset rules is available on www.ato.gov.au.
TAXPAYER ALERT
Taxpayer alerts are intended as an ‘early warning’ to taxpayers and their advisers of significant tax planning issues or arrangements that the Tax Office has under risk assessment or about which it has concerns.
Article by Christie Lewis
Christie is Practice Manager at Alan Lewis Accountants . Besides accounting, her passion is for all things small business (and blogging, of course). You can contact Christie directly at christie@lewistaxation.com.au.
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