Current news from our news service

Hot Issues
spacer
Stage 2 – Covid-19 stimulus package.
spacer
Covid-19 Update - Small Business
spacer
PM launches $17.6 billion virus stimulus plan
spacer
SG amnesty bill passes Parliament
spacer
ATO flags most common SMSF return mistakes
spacer
Expected GDP by country 2010 to 2100
spacer
ATO expands small business review pilot
spacer
A resource hub for our clients.
spacer
Risks when dating documents in 2020
spacer
Australian Taxation Office (ATO) debts may affect your credit rating
spacer
Statistical picture of Australia - Update
spacer
Absentee Property Owner – Tax Whack - Victoria
spacer
Debate heats up around $10k cash ban bill
spacer
There’s still time to move to Single Touch Payroll (STP)
spacer
Real Time World Population Growth - Wow!!
spacer
ATO audits continue to target Lifestyle assets
spacer
Property deduction errors down to ‘lack of understanding’: ATO
spacer
Data can be great stuff! - Australia
spacer
GST refunds for returned imported goods
spacer
14k employers, $230m in super: Financial Services Minister defends proposed SG amnesty
spacer
Bushfires 2019–20 (ATO)
spacer
Accounting profession responds to bushfire crisis
spacer
Helping your business survive a natural disaster - ATO
spacer
Single Touch Payroll (STP) – now ensure super is paid on time.
spacer
Beware of Australian Taxation Office (ATO) impersonation scams
spacer
Australia by the Numbers
spacer
‘Visible, valued and owned’: ATO outlines super priorities for new year
spacer
Introductory Rates & Interest Free Periods
Article archive
spacer
Quarter 4 October - December 2019
spacer
Quarter 3 July - September 2019
spacer
Quarter 2 April - June 2019
spacer
Quarter 1 January - March 2019
spacer
Quarter 4 October - December 2018
spacer
Quarter 3 July - September 2018
spacer
Quarter 2 April - June 2018
spacer
Quarter 1 January - March 2018
spacer
Quarter 4 October - December 2017
spacer
Quarter 3 July - September 2017
spacer
Quarter 2 April - June 2017
spacer
Quarter 1 January - March 2017
spacer
Quarter 4 October - December 2016
spacer
Quarter 3 July - September 2016
spacer
Quarter 2 April - June 2016
spacer
Quarter 1 January - March 2016
spacer
Quarter 4 October - December 2015
spacer
Quarter 3 July - September 2015
spacer
Quarter 2 April - June 2015
spacer
Quarter 1 January - March 2015
spacer
Quarter 4 October - December 2014
Quarter 4 of, 2015 archive
spacer
FBT – Christmas Parties and Taxi Fares
spacer
Merry Christmas for 2015 and Happy New Year.
spacer
Common errors in claiming deductions for super contributions
spacer
Employee Christmas Parties and Gifts – Any FBT?
spacer
Collectables Require Action Now
spacer
Why the ATO’s new powers make SMSF compliance more important than ever
spacer
Self Managed Superannuation Funds – Is it for Retirement?
spacer
ATO warns against misusing partnerships
spacer
The Scammers Shame
spacer
ATO offers SMSF 'unwinding' for aggressive tax arrangements
spacer
Salary and Wages PAYG Shortfall
spacer
SuperStream
spacer
Australian Taxation Office (ATO) Telephone Scammers – BEWARE!
spacer
Navigating the BDBN minefield
spacer
SMSFs warned on emerging LRBA issue
spacer
Short Access to Term Deposits
spacer
Retirees taking super in lump sum is a ‘myth'
Self Managed Superannuation Funds – Is it for Retirement?

             

A fundamental requirement is that superannuation funds meet a sole purpose test – the provision of retirement benefits.  If it appears that there is a different purpose, the fund can become non-complying.

The auditor, the tax office and the court, will look at all the circumstances to form an opinion.  If that happens, the trustee will have difficulty proving them wrong.  (That is called burden of proof).

Is it likely that a purchase of a residential property and leasing it to a child, who doesn’t pay rent or pays less than market rent, would be to the benefit of the members?

Do you think the purchase of a caravan or a motor vehicle or some hobby farm expenses, is for the benefit of members at their retirement?

It is highly likely that the answer to those questions is no and therefore the fund is not being provided for the sole purpose of providing retirement benefits.

That means that the fund becomes non-complying.  It could also mean that the trustees are liable to pay penalties personally and quite substantial ones.

It is not easy always to determine whether something is for the sole purpose of retirement benefits, but one example recently was decided on the basis that the provision of rental income was on non arms length terms to the member's son.

 

Source:  Written for AcctWeb by a Melbourne accounting firm

 

site By PlannerWeb