Beware! The ATO’s eyes are open… and they’re on a mission!
Barbara was on a mission of her own, until the ATO slowed things down markedly for her. She had decided to use part of her superannuation assets to invest in a Private Company opportunity, and so had engaged Greenlight to set up an SMSF.
All was on target until she received notice that her brand new SMSF would be one of the 15,100 SMSF establishments this year that would be randomly audited by the ATO (up from 9000 in 2012-13). That in itself was not a problem, and from our perspective a positive that such action was being taken by the ATO. A crackdown on unscrupulous operators and spruikers can only be a positive outcome for everyone!
Fast forward 4 months, and as we sit currently, her fund has been suspended until October 2014, still another 8 months away. Why?
As part of the audit, the ATO reviewed all of her personal and business affairs and uncovered overdue personal returns and business lodgements. She was given 1 month to rectify the outstanding items, and did that. But while overseas for 5 weeks over the Christmas break, a further request and deadline was missed, and…. Well you know the punch line.
And the consequences are devastating. Not only did Barb miss out on the investment opportunity completely, her intended rollovers are now sitting in cash in her incumbent retail fund – earning practically nothing in the current environment.
Furthermore, she has been forced to rethink her intended investment strategy for the Fund – a distressing outcome for someone who thought they had their retirement future mapped out.
Needless to say, a lesson for anyone currently setting up a fund, or thinking about it… The house needs to be in order. Call it a by-product or even unintended consequence of the crack-down, but a stark reminder that the ATO has no tolerance for tardiness or oversight, especially when it comes to who is entitled to run their own SMSF!
