The ATO is in the process of examining all SMSF investments in unit trusts as part of its compliance activities regarding related-party transactions, a technical expert has revealed.

In the coming months the ATO will be increasing its activity against the most serious and common compliance breach, being SMSFs with significant balances that have continually failed to lodge an annual return.

The SMSF industry will eventually move to a true real-time processing world as part of its evolution through using technology, as well as its response to newer compliance developments such as events-based reporting.

SMSFs with related-party limited recourse borrowing arrangements (LRBA) could face further administrative expenses and will require more time and effort if standardised benchmarking across all types of transactions becomes an expectation of the regulator.

The SMSF Association has called on SMSF trustees to take action now if they want to use the capital gains tax (CGT) relief provisions contained in the super reforms as part of their strategy to comply with the new transfer balance cap.

The ability for an SMSF to implement a strategy of using a related party limited recourse borrowing arrangement (LRBA) to purchase certain assets not covered by the ATO safe harbour guidelines, such as a parcel of unlisted shares, without having the income from the investment being treated as non-arm’s length, may well be impossible.

BGL Corporate Solutions believes the ATO has significantly underestimated the complexity of the new events-based transfer balance account reporting (TBAR) regime requirements, the amount of data that will be reporting and the impact on compliance costs on SMSFs and the broader super industry.

The SMSF Association has applauded the federal government’s decision to provide the ATO with additional funding for a Superannuation Guarantee Taskforce aimed at cracking down on employers failing to comply with their superannuation guarantee (SG) obligations.