The ATO’s data-matching ability marches on, relentless in its pursuit of transgressors.

– Trustees for 17,500 SMSFs were queried about an apparent lack of investment strategy, a critical component of the trust deed.

– Trustees for 16,500 SMSFs have been questioned about unchanging asset valuations over the past three years. Two of those classes – commercial and residential property – have increased in value by 20+% over that same time interval.

The ATO is worried that the funds have not met their legal requirement under Reg 8.02B, to value and reports assets “at market value each year”.

But it doesn’t stop there.

– The ATO also notified over 1,000 Auditors* that of these “high risk” SMSFs, there were no ACRs lodged for breaches of market valuation rules.

The Upshot:

– The ATO is watching; and in 2024 they have shown a zeal for enforcing regulatory requirements and imposing associated penalties and fines.

– Trustees need to be aware that if there are no up to date asset valuations, there will be pushback from auditors. Or their audit will be delayed and riddled with caveats and disclaimers.

– PI Insurance for SMSF Auditors is skyrocketing.

– Asset valuations for those trustees approaching the $3M individual balances will be under pressure leading into 25 June 2024.

Trustees will want to see high valuations leading into that date, and lower ones afterwards to help with their balance situation. It will be an onerous test for some of you.

It will be interesting to see how the new Div 296 ($3M member balance) ends up once finally legislated. The leadup to 2025 and 2026 will be interesting times, methinks.

I look forward (like a mud crab to a hot bath) to the Federal budget in May. 

My spidey senses are tingling…

As always if you want to discuss your client's SMSF - or ask Joel any tricky SMSF questions - just call 1300 874 787 or email audits@trisuperauditors.com.au. 

* I'm glad to note TSA was not one of them.