Compliance program 2011-12

Self-managed superannuation funds

Self-managed superannuation funds allow people to control their own super investments for their retirement. Each year there are about 30,000 new self-managed superannuation funds established. At 31 March 2011 there were over 445,000 funds in operation.

Trustees of self-managed superannuation funds are responsible for running their funds in accordance with the strict requirements for attracting concessional tax treatment. We will continue to support the vast majority of trustees seeking to do the right thing by providing guidance and support such as the SMSF News publication, both to trustees themselves and the intermediaries they rely on such as approved auditors.

We work with self-managed superannuation funds trying to fix problems that may occur. We also take firm action, including making funds non-complying, if they commit serious breaches of the rules.

Failure by a fund to lodge an annual report is a breach of tax and superannuation law. Where a self-managed superannuation fund has repeatedly not lodged a return we may issue assessments with penalties based on the information available to us. As these funds have not met their regulatory obligations we may also make the fund non-complying. This will result in the fund losing access to concessional tax treatment. Prosecutions may result where trustees fail to meet their fund's lodgment obligations.

This year, the focus of our compliance activity will be on:

• newly registered funds, to ensure they have not been established to provide illegal early release of superannuation funds to their members
• funds lodging their first annual return to ensure they are entitled to receive their 'notice of compliance'
• auditor contravention reports
• related-party investments, to ensure they are not contravening the prohibition of lending to members or the 5% in-house asset limit
• exempt current pension income and non-arms length income
• re-reporting of contributions and compliance with excess contributions tax release authorities.

Where appropriate, we will apply non tax shortfall penalties to cases where we identify incorrect fund reporting.

Sections within Micro enterprises

• Employer obligations
• Contractors
• Information matching
• Government payments
• Internet trading
• Reconstruction activity
• Cash economy
• Small business benchmarks
• Investments
• Self-managed superannuation funds
• Business activity statements
• Wine equalisation tax producer rebate
• Excise equivalent goods
• Managing tax debt