ATO targets do-it-yourself super

The Australian Taxation Office has renewed its warnings to trustees of self-managed superannuation funds after finding that many do not understand their basic legal obligations. The sole purpose test cannot be explained by 30 per cent of trustees, 15 per cent do not have an investment strategy in place and 50 per cent do not take any action when the fund auditor advises them that their fund has broken the law. ATO assistant deputy commissioner, Ian Read, said that there would be 11,000 audits of small super funds this year and that there were many cases where trustees have lent their retirement funds with little consideration of risk, diversity or the ability for successful recovery action if required. In one case a trustee lent someone he had met socially $200,000 who ran off with the money and later declared himself bankrupt.

Source: The Australian Financial Review