1. Property Valuations
These have risen dramatically over the past 12 months and will have a material impact on asset valuations within the fund.
Be prepared and get a property re-valuation.
2. Covid rent relief for related parties
The ATO relaxed these rules during unprecedented times. But their vigilance is returning.
Make sure that the rent reduction agreements are documented. And that the reduced rent had a market valuation at the time.
3. SMSF Investment strategies
These are still poorly considered. And most that come across my desk look as it they have just been a pro-forma exercise.
The ATO is monitoring this, and it will become an issue. All it will take is an aggrieved third party to be disappointed and they will lawyer up.
It is already happening in other areas of the SMSF world.
4. Non-arm’s length transactions
A perennial issue. The key one: rental agreements between related third parties. The rents charged lack market valuations and many lease agreements lack provision for annual rent increases.
Which would be nice in the real world, but unlikely.
5. Access to benefits prior to condition of release
Last year people were allowed to draw down money from their super account under strict conditions.
Many people assumed that that applied to them. Without getting ATO authority.
Please check that if your clients did do so, they were eligible. Otherwise, we will need to remedy this asap to avoid any penalties.
Other things to watch out for:
- Multiple Year Audits
Given the events of last year it is not surprising that many SMSFs are late. I’m still seeing many multiple years audits come through.
Just be mindful that although the ATO is being lenient they have also given fair warning. Start lodging.
Because they will start cracking down.
- SAN misuse
Sadly this does occur. Hopefully an accidental oversight. The ATO is tracking and verifying these.