New ATO safeguards against using SMSFs for illegal activity may be detrimental.
The Self-Managed Super Funds Professionals' Association of Australia (SPAA) has expressed concerns over the new Australian Taxation Office (ATO) measures about to be implemented to help stop fraudulent activities using self-managed superannuation funds (SMSFs).
The ATO is looking to introduce a new category for SMSFs that have been formed and have applied to be regulated by the tax office but are yet to lodge an income tax return and annual return to prevent their use in illegal schemes.
Previously, SMSFs at this stage of the registration process were automatically granted complying fund status, meaning they were included on the Super Funds Lookup facility immediately - a situation fraudulent operators exploited.
"There is still some concern from SPAA's point of view about the impact this change will have on SMSFs," SPAA chair Sharyn Long told InvestorDaily.
"We would be very concerned if in any way the new category suggests that the fund was not in any way complying," she said.
"We don't have a problem with it being noted that it is a new fund and it hasn't lodged a return, but if the changes to Lookup in any way suggests that a fund is non-complying then we would see that as being very detrimental to the sector."
Long said it also may have practical implications as a non-complying fund cannot accept contributions made under the superannuation guarantee charge.
The situation will be clearer for all concerned once the ATO has finalised the terminology for the new category, according to Long.
Industry associations have bucked the trend of remaining stoic and standing firm alone for their members, instead choosing to band together to lash out at the current recommendations of the Cooper review.
