SMSF trustees who have not complied with SuperStream rules when rolling money out of a fund should work closely with their auditor to document events, which may help prevent the ATO imposing administrative penalties for the breaches, a technical expert has advised.
Heffron head of SMSF technical and education services Lyn Formica said any failures to comply with SuperStream rules were breaches of payment standards under Superannuation Industry (Supervision) regulation 6.17 and will need to be reported by the fund auditor to the trustees and the ATO.
“Auditors will have to report that contravention and will go through to the trustee in the form of a management letter,” Formica said during an online accountants and auditors briefing today.
“If you think it’s material, then you would also qualify Part B of the auditor’s report. If it meets the usual reporting criteria, then you would also have to lodge an auditor contravention report (ACR).”
She added this reporting was important for the trustees as they could face administrative penalties of $4440 for each trustee and any possibility of remittance of the penalty by the ATO may depend on whether they made genuine attempts to comply with the rules.
“We have got a very good case, particularly in these early stages of the process when we’re all learning how these things work,” she said.
“What I encourage auditors to do is explain any mitigating circumstances in the contravention report and for trustees to go to them and tell them what your story was.
“You are not trying to stop them lodging the ACR, but they can put all the reasons about why you were not able to comply with the three-business-day rule, why the client did multiple transfers instead of one.
“That is going to make things a lot easier when the ATO is looking at the ACR and hopefully is going to mark it off as a ‘nothing to see here, they tried their best’ type of scenario.”
