In July 2012, our Assistant Commissioners Stuart Forsyth (Superannuation) and Ann Hurst (Aggressive Tax Planning) met with super advisers to gain a direct understanding of the issues and risks affecting the super industry.
These visits are part of our approach to:
- engage and establish an open and frank dialogue with the industry
- identify emerging issues and aggressive tax planning risks
- understand current trends and patterns in the self-managed super fund (SMSF) market.
Fifteen face-to-face meetings with 35 SMSF advisers were held in Brisbane, Adelaide, Sydney and Melbourne. We have conducted similar visits for the last three years, however this year we met with a smaller but more diverse group of SMSF advisers, including SMSF administrators, auditors, accountants and lawyers.
We received an overwhelmingly positive response from the super industry and the advisers. It has given us an insight to the 'hot' issues facing the SMSF industry.
Advisers informed us that there is a visible increase in SMSFs entering into limited recourse borrowing arrangements (LRBA) and property developers are approaching SMSFs directly or through SMSF advisers to push for properties.
Advisers are genuinely concerned that there is a lack of understanding by the trustees and some accountants of how the LRBA rules operate. Some of these issues include:
- confusion over which entity should hold the loan
- contracts being executed incorrectly (including purchase contracts being signed by the SMSF trustee rather than the trustee of the holding trust)
- property contract signed before the establishment of the holding trust
- an absence of loan documentation.
The information we collect during these visits helps us continue to develop and refine targeted support services for SMSF trustees and advisers. Advisers welcomed our publishing of SMSFR 2012/1 Self-managed superannuation funds: limited recourse borrowing arrangements - application of key concepts which should address some of the areas of the concerns in this area.
Last Modified: Wednesday, 28 November 2012