SMSF trustees and advisers need to be aware of the discretionary powers in the hands of the Australian Taxation Office (ATO) in its use of the Super Fund Lookup facility as they are wide ranging and do not incorporate an appeals process, according to a sector specialist.
“The ATO’s power in this area is extremely extensive,” Townsends Business and Corporate Lawyers principal Peter Townsend said.
The SMSF lawyer raised his concerns on the subject based on a case where two trustees of an SMSF were previously involved in an illegal early release scheme, penalised for it, but now could not have the fund’s Australian business number (ABN) included on the Super Fund Lookup site in order to receive benefit rollovers from another public offer super fund. This is despite the fact the SMSF has now been deemed a complying fund.
Enquiries to the ATO about the subject prompted referrals to ABN legislation that detailed a list of reviewable ABN decisions, however, circumstances involving Super Fund Lookup were not included, effectively eliminating any appeals process.
“The inconsistency of approach, the vagueness of the rules that apply and the substantial discretion enjoyed by ATO officers [in this case] show clearly why the rule of law is so preferable to simply the rule of bureaucracy, which allows public servants to make arbitrary decisions affecting taxpayers and, according to them, with no right of appeal,” Townsend said.
The case prompted Townsend to investigate the source of power the ATO had in regard to Super Fund Lookup.
“The answer is there is none. Super Fund Lookup is a service provided by the ATO. They have decided to provide this service off their own bat as part of their general role and duty to administer self-managed superannuation,” he said.
“But there is no specific legislative or regulatory regime that deals with Super Fund Lookup.”
The case presented several takeaway messages for SMSF trustees and their advisers, he said.
“Trustees need to be aware, firstly, that they have obligations and, secondly, they should be aware of what those obligations are in general terms,” he said.