The Australian Taxation Office (ATO) has warned SMSF trustees to carefully evaluate the professional standards employed by organisations offering administrative services based overseas before making a commitment to using them.
In response to questions raised via a LinkedIn discussion group, ATO deputy commissioner of superannuation Alison Lendon said: “We do suggest people exercise caution when considering such arrangements to ensure the offshore services are of the requisite professional standard.
“We have seen situations where they have not been, including where personal details of trustees and their SMSFs, like names and bank account details, have been published to the web and misused.”
While suggesting a degree of caution was needed, Lendon said using those services was not a bad thing in itself as long as a few necessary arrangements were put in place.
“Provided that the audit of the SMSF is carried out by a registered person in accordance with Australian Auditing Standards and with any other appropriate guidelines issued by AUASB (Auditing and Assurance Standards Board), the ATO would be satisfied,” she said.
“The trustee would also have to ensure that documents and accounts are protected and readily available to themselves, their auditors and the regulator (the ATO). As long as they can cover these conditions, then ‘offshore’ providers would meet SISA (Superannuation Industry (Supervision) Act) requirements.”
She was also asked if cloud-based SMSF administration systems that housed their servers offshore complied with the requirement that the super fund’s records be kept in Australia.
The deputy commissioner responded: “If the trustee(s) ensure that physical records are maintained in Australia and are easily available to all trustees, the SMSF auditor and the regulator upon request, there is no barrier to using cloud-based services with servers outside of Australia.”