ATO Interpretative Decision
ATO ID 2002/976 (Withdrawn)
Superannuation
Retirement income entities: keeping assets of a self managed superannuation fund separate from assets of other parties.FOI status: may be released
-
This ATO ID is withdrawn because it contains a view in respect of a provision of the Superannuation Industry (Supervision) Act 1993 that does not apply after the 2012-13 income year.
Despite its withdrawal, this ATO ID continues to be a precedential ATO view in respect of decisions for income years up to, and including, the 2012-13 income year.
See ATO ID 2014/7 Keeping Money and Other Assets of a Self Managed Superannuation Fund from Assets of Other Parties, which reflects substantially the same view in respect of the replacement provisions, for decisions for income years after the 2012-13 income year.This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Has a contravention of subsection 52(2) of the Superannuation Industry (Supervision) Act 1993 (SISA) occurred where a self managed superannuation fund (SMSF) shares a bank account with related unit trusts?
Decision
Yes, each SMSF must open and maintain its own bank account to keep its assets and money separate from that of other entities.
Facts
The trustees of the SMSF are members of a family.
The fund has a standard employer-sponsor and all the trustees work for the standard employer-sponsor in various capacities.
There are several unit trusts owned and operated by the SMSF and/or the trustees.
The trustees have stated that, for administrative simplicity and cost savings, unit trusts jointly owned by the SMSF and trustees as well as units trusts owned by the SMSF operate the one bank account. The account is held in the name of the SMSF.
Reasons for Decision
Section 52 of the SISA prescribes the covenants which are taken to be included in the governing rules of a regulated superannuation fund. In particular paragraph 52(2)(d) of the SISA requires the trustees to keep the money and other assets of the SMSF separate from any personal money and assets of the trustees and money and assets of a standard employer-sponsor, or an associate of a standard employer-sponsor, of the SMSF
The unit trusts are associates of the standard employer-sponsor in accordance with section 12 of SISA.
The published position of the ATO on separation of assets advises trustees that an SMSF should not share a bank account with any other entity.
Date of decision: 11 July 2001
Legislative References:
Superannuation Industry (Supervision) Act 1993
Section 52
Other References:
Factsheet: Duties of trustees (self managed superannuation funds)
Factsheet: Checklist for Self Managed Superannuation Funds
Factsheet: Checklist for Self Managed Superannuation Funds (Long version)
Booklet: Self Managed Superannuation Funds - A do it yourself guide for trustees running a SMSF
Keywords
Self managed superannuation funds
SIS covenants
SMSF trustee duties
SMSF related parties
ISSN: 1445-2782
| Date: | Version: | |
| 11 July 2001 | Original statement | |
| You are here | 7 March 2014 | Archived |
Copyright notice
© Australian Taxation Office for the Commonwealth of Australia
You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).
