ATO raises ‘illegal early access’ concerns with small business owners
Recent research by the ATO has revealed a higher proportion of loans to members and non-lodgements among SMSF members with links to small business.
In a recent conference in Sydney, ATO assistant commissioner, SMSF risk and strategy, Justin Micale said the ATO has recently been conducting new demographic analysis which will drive the regulator’s strategies going forward.
“This research will also help identify where we need to do more to help trustees get it right,” stated Mr Micale speaking at the CA ANZ SMSF National SMSF & Financial Advice conference.
The analysis has looked at fund members with links to small business and private wealth groups, to try and understand if they display different behaviours.
The research has only just commenced but it is already providing some useful insights to help us build a deeper and more differentiated understanding of the population, said Mr Micale.
The preliminary results show around 45 per cent of funds have links to a small business, while 25 per cent are linked to a private wealth group.
“We have found that as a proportion, the incidence of non-lodgment and loans to related parties is higher for those funds with members operating a small business than those linked to other segments,” noted Mr Micale.
Mr Micale said early access to retirement savings was still one of the most common contraventions among SMSFs.
“Accessing the assets of the fund before meeting a condition of release, even if it’s to support a member’s business, still constitutes illegal early access,” he said.
“For more serious breaches there are a range of sanctions that we may apply. For instance, in 2021/22, we disqualified 252 trustees in total for serious breaches of the law, while other contraventions attracted administrative penalties totalling $3.4 million.”
Mr Micale told attendees that while financial stress does entice people to tap into the super fund before they should, some of this is being driven promotors or illegal early release schemes.
“The other driver is people entering the system when perhaps they shouldn’t. So they are the two areas we are working on,” he said.
The ATO, he said, will soon release a fact sheet that talks about when people can access their super and the consequences of them doing that when they shouldn’t.
“At the same time, our compliance activities will ramp up, so you will see more activity on our end to ensure that those that don’t heed the warnings will face consequences for their actions,” he warned.
20 October 2022
smsfadviser.com
Latest Newsletters
Hot Issues
- SMSF assets reach record levels amid share market rally
- Many Australians have a fear of running out
- How to get into the retirement comfort zone
- NALE bill passed by parliament
- Compliance focus impacts wind-ups
- LRBA interest rates increase for 2025
- Income-free areas set to increase from 1 July
- Most Spoken Languages in the World
- Middle-to-higher incomes boosting SMSF growth
- Investment and economic outlook, May 2024
- Transitioning into retirement: What you should know
- Plan now to take advantage of stage 3 tax cuts
- Deeming freeze a win for Age Pensioners
- Downsizer contributions can be time critical
- The superannuation changes from 1 July
- The Deadliest pandemics in History
- Winners & Losers
- Budget breakdown – Federal Government Analysis
- Federal Budget 2024
- Getting to a higher level of financial literacy in Australia
- What is the future of advice and how far off is superannuation 2.0?
- Investment and economic outlook, April 2024
- Australia’s debt service ratio ‘extraordinary’: CBA
- Connecting an adviser with your children
- ACCC scam report
- The Shortest-reigning Monarchs in History
- ATO warns trustees about increasing crypto scams
- Aged care report goes to the heart of Australia’s tax debate
- Removed super no longer protected from creditors: court
- ATO investigating 16.5k SMSFs over valuation compliance
- The 2025 Financial Year Tax & Super Changes You Need to Know!
- Investment and economic outlook, March 2024
Article archive
- April - June 2024
- January - March 2024
- October - December 2023
- July - September 2023
- April - June 2023
- January - March 2023
- October - December 2022
- July - September 2022
- April - June 2022
- January - March 2022
- October - December 2021
- July - September 2021
- April - June 2021
- January - March 2021
- October - December 2020
- July - September 2020
- April - June 2020
- January - March 2020
- October - December 2019
- July - September 2019
- April - June 2019
- January - March 2019
- October - December 2018
- July - September 2018
- April - June 2018
- January - March 2018
- October - December 2017
- July - September 2017
- April - June 2017
- January - March 2017
- October - December 2016
- July - September 2016
- April - June 2016
- January - March 2016
- October - December 2015
- July - September 2015
- April - June 2015
October - December 2022 archive
- A 2022 Advent Calendar for our clients
- Volatility is here to stay
- Three things to consider when switching your super
- Making the most of your super limits
- SMSF professionals play critical role in Age Pension planning
- Positive results from research into the value of financial advice.
- Advisers warned on major timing traps with lifetime CGT cap
- Draft legislation released for franking credit changes
- Budget October 2022-23 - Comprehensive summary
- Federal Budget: all the key points you need to know
- Federal Budget 2022: Winners and Losers
- Federal Budget 2022/23 - Documents and Facts Sheets
- ATO raises ‘illegal early access’ concerns with small business owners
- Investors and recessions
- Rapid interest rate rises reveal global market frailties
- ASIC consulting on changes to SMSF advice guidance
- ATO taking ‘harsher’ stance on loans to members
- How costs can add up
- Take action on valuations now to avoid delays, says ATO
- Four powerful ways to build investing confidence
- ATO provides cyber security tips for SMSFs
- The advantages of investing early
- Partial property sales eligible for downsizer
- The Countries that Consume the Most Beer in the World