Administration, ATO, Compliance, Investments

ATO SMSF investment role spelt out

ATO SMSF Investment strategy Investments

The ATO’s role in assessing whether an SMSF investment strategy is appropriate has been confirmed by a financial services practice principal.

The principal of a financial services practice has clarified the powers the regulator actually has over the appropriateness of an SMSF investment strategy.

The confirmation was given in response to a delegate’s question at the Institute of Financial Professionals Australia 2024 Conference held in Melbourne last week that queried what the ATO considered a balanced SMSF investment strategy and whether, for example, a 100 per cent portfolio allocation to cryptocurrency would be deemed satisfactory in this regard.

Further, the question was raised as to whether an SMSF portfolio consisting entirely of crypto-assets would constitute the fulfilment of an individual’s responsibilities as a fund trustee.

“The simple answer to that [question] is that is not the ATO’s jurisdiction,” TAG Financial Services partner Michelle Griffiths confirmed.

“It has no control or ability to say that the investment strategy is a good or bad one. That is not its purview.

“[The regulator’s role is literally to determine if the trustee] either complies or doesn’t comply with the investment strategy that is documented. It is as simple as that.

“If you’ve got a bad investment strategy, the ATO can’t have a go at you about that.”

A separate attendee question sought to discover what assistance the regulator is looking to provide to auditors with regard to asset valuations in preparation for the proposed tax on total super balances over $3 million with the anticipated heightened pressure practitioners will experience as trustees attempt to respond to the measure.

“We’re working on items at the moment, but I think the key [will be] in supporting auditors so that they can make the right decisions rather than being influenced by trustees or the members of the fund,” ATO superannuation and employer obligations assistant commissioner Peta Lonergan said.

“We will be providing lots of guidance around this issue.”

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