ATO seeking deeper data on SMSF investments

ATO data SMSF investments

The ATO would like to collect more detailed data on SMSF investments and may consider changes to the annual return to gather it.

The ATO has recognised the need for more detailed reporting within the SMSF annual return and may consider making changes to gather more in-depth data on where funds investments, according to ATO SMSF segment assistant commissioner Dana Fleming.

Fleming, who was speaking at the Chartered Accountants Australia and New Zealand 2019 National SMSF Conference in Sydney, said she wanted the ATO to have better data, but it was working with what it had to hand.

“I wish we had better data, but we only have what is on the returns,” she said, adding the ATO looked to the range and depth of data collected from groups such as Class.

“I would love better data and granularity and hope to improve that for ourselves.”

The comments were made in response to a question that noted the recent ATO letter campaign focused on investment strategies was based on annual return data and did not consider underlying exposures, and that the return form was limited in the information that could be provided.

Fleming responded that she was looking at changing the labels used to describe assets in an SMSF “so we get better visibility of what people are actually invested in”, pointing out labels such as unlisted trusts covered a broad range of investments.

Commenting on the letters, she highlighted they were only written to a very specific part of the SMSF population – those that were leveraged, and in 99 per cent of cases into a property investment.

“We knew they were in property, and we knew they were leveraged, and that was why we wrote to them because they had over 90 per cent of assets in a single property. There is nothing wrong with that if that’s what you want to do. Self-managed means people have the right to choose to do that,” she said.

“They do need to be aware with a leveraged property of what the risks are and we do want to see people acknowledging that and turning their mind towards that in formulating their investment strategy.

“It may be the right approach to them to reach their retirement goals, but we do need to see them addressing the four factors in regulation 4.09 to show they understand and see the risks they are taking on in forming that strategy.”

The letter campaign has raised questions the ATO may be looking at a similar approach across a wider segment of the SMSF sector. The ATO, however, recently told selfmanagedsuper it had not made any decisions in that area and was satisfied with the level of trustee awareness generated by the campaign.

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