If you manage your own super funds, do take note of some of the following common mistakes committed by trustees:
Making loans to members
Borrowing by a fund
Investing > 5% (In-house asset limit)
Breaching the sole purpose test
Failure to lodge annual tax and compliance statement on time
With the accelerated popularity of SMSFs, it is critical for one to understand the attached responsibilities that come with it. The current findings support the fact that there is a lack of knowledge on the operations of SMSFs. This raises considerable concern especially if one looks at the original purpose that the government has intended for superannuation.
In response to this, the ATO has increased its compliance activities and will focus their efforts on approved auditors of SMSFs. This makes logical sense since they have to report all identified contraventions to the ATO, thereby serving as key watchdogs on SMSF compliance.
Still, in light of the above issues, SMSFs are here to stay. They serve as excellent investment vehicle for wealth creation and protection. For those who are prepared, the opportunities that SMSF offers are there.