Individuals have been warned about participating in employee share schemes via an SMSF.
The Australian Taxation Office (ATO) has issued a warning to trustees to be wary of the consequences when nominating a self-managed superannuation fund (SMSF) as the acquirer of shares or options accessed via an employee share scheme.
According to the ATO, these types of transactions can cause problems if the tax treatment is not performed in the correct manner.
"For the individual who has nominated their SMSF, there can be penalties if the discount on the shares and options isn't accounted for in their tax return," ATO commissioner Michael D'Ascenzo said.
In addition, these transactions are considered contributions to the SMSF by the ATO, which means they must be taken into consideration when looking to comply with the current superannuation contributions caps.
The ATO also pointed out that these types of transactions may create compliance issues for SMSF trustees as well.
To this end, the regulator is worried that in some circumstances nominating an SMSF as the acquirer of shares or options accessed via an employee share scheme may constitute the intentional acquisition of assets from a related party.
If this is the case, an SMSF may find it has breached section 66 of the Superannuation Industry Supervision Act.
"For an SMSF, acquiring an asset from a related party can put the fund at risk of being made non-compliant and taxed at 45 per cent," D'Ascenzo said.
"Trustees who intentionally acquired shares or options from related parties contrary to the superannuation law may face up to one year in jail," he said.
In its warning, the ATO said it is the trustee's responsibility to make sure the fund is able to acquire assets that are transferred from a related party.
"Anyone unsure of their situation should seek independent advice or contact the ATO for advice on their individual circumstances," D'Ascenzo said.
The two non-consecutive alphabetic letters encountered most often last week caused more controversy than the underlying policy they represented, Wouter Klijn writes.... read more »
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