Wednesday, 13 June 2012

Auditor-General warning on ATO and SMSFs

Auditor-General warning on ATO and SMSFs


Auditor-General warning on ATO and SMSFs
The Australian Taxation Office (ATO) has been guilty of inconsistency in the delivery of its interpretive decisions covering self-managed superannuation funds (SMSFs), according to the Australian National Audit Office (ANAO).
At the same time, the ANAO has cautioned that SMSF trustees need to understand that ATO interpretive assistance to SMSFs is "not legally or administratively binding on the Commissioner".
"Although the model for delivery of SMSF interpretive assistance closely mirrors the model used for taxation matters, a substantive difference between the two is the level of protection that trustees can expect," it said.
The ANAO's cautionary words with respect to ATO interpretive decisions and SMSFs are contained in a report issued late last week - Interpretive Assistance for Self Managed Superannuation Funds.
The auditor-general's report found that while, overall, the ATO's management of SMSF interpretive assistance was effective and based on sound processes, one area requiring a stronger focus was the timeliness of delivery "which has been inconsistent over time".
"Fewer than half of the SMSF public rulings and determinations have been delivered within the ATO's standard timeframe since 2008," the ANAO report said.
As well, it suggested that there would be value in the ATO consulting with the SMSF sector to determine whether its interpretive assistance products met the expectations of the SMSF market.
On the key question of legal and administrative status of interpretive decisions with respect to SMSFs, the ANAO warned that the different status might not be apparent to all trustees.
"It is certain that trustees fully understand the legal weight of SMSF interpretive assistance," the report said.

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