Over recent years more than 16000 breaches have been reported to the Tax Office:
18% were loans to members
16% assets in the wrong name
14% breached in-house asset rules
11% documents request by the auditor
9% fund borrowing for purpose not allowed by the legislation
8% breach of the sole purpose test
Errors made by trustee’s every day are almost always simple and basic, and most times they are usually honest mistakes.
Example (Things that can go wrong)
A Timber Lot investment was shown as an asset in the accounts of the superfund. The supporting documentation showed the asset was held in the name of the trustee only.
The contravention was reported and the Tax Office subsequently called to see if the item had been rectified.
The Fund provided to Bellas Accountants an email to the Timber Lot Company requesting the title be shown correctly in fund name however the company advised that it was no longer possible for the asset title to be transferred to the fund because the trustee claimed the deduction in their individual tax return.
The Timber Lot Company also provided a tax office ruling saying that it was no longer eligible to make such a transfer.
If you would like to read some more information on minimizing these basic common errors, please call our office.