Sent: 10-07-2012 10:06:02
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In mid June the Administrative Appeals Tribunal handed down a strange decision.
Please note, I mean no disrespect by making this comment.
The decision is strange because based upon the written judgement it appears to go against the flow of similar cases over the last two years.
This particular case involved a SMSF which had loaned money to a company related to the super fund. No interest had been paid on this loan. The Tax Office reviewed the fund after the fund's auditor reported these breaches. The SMSF's trustees signed an enforceable undertaking with the ATO stating that the company would repay the loan within six months of signing this document. This time elapsed and loan remained outstanding. The ATO didn't hesitate to make the fund non-complying. The trustees objected - this was rejected and then elected to complain to the AAT.
During the last two years, cases similar to this one have all gone the ATO's way. That is, any SMSF with similar circumstances has complained to the AAT they've been shown a reasonable level of sympathy but ultimately been left with a hefty penalty and remained a non-complying super fund.
Interestingly many of these cases have also referred to previous similar AAT cases to justify the decision made.
This case goes against these other decisions.
What's the takeout in all this? I'm not sure. Maybe this recent decision is a oncer. We won't know until other cases are decided over the next while.
Perhaps we need some high level judicial input into the powers given to the Tax Office when it's appropriate to declare a super fund to be non-complying. The problem with this idea is the time and money that would need to be expended.
You can read this recent AAT decision here: http://www.austlii.edu.au/au/cases/cth/AATA/2012/375.html
Version 6.0 of my SMSF book is now available.
You can see all the changes that have been made between Version 5.1 and 6.0 (the latest edition).
You can look at the contents page at the following link: http://www.atcbiz.com.au/r.php?r=0mjd6ne
For details of the changes made from version 5 to version 6 visit: http://www.atcbiz.com.au/r.php?r=d5xcpch
As you'll see from the list there have been many changes.
Two purchase options are available - once only subscription - $55 inc GST - or an annual subscription will gives you access to all the updates made throughout the year ($120 inc GST). The book can be purchased at the following link: http://www.atcbiz.com.au/r.php?r=5a4agqb
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