The ATO have recently announced they will be contacting the trustees of approximately 17,700 SMSFs to discuss their fund’s investment strategy and whether they are actively working towards a diverse strategy.
The funds within the ATO’s view are those which are invested in a single asset or asset class or have more than 90 per cent of the total fund value invested in a single asset or asset class.
The ATO’s concern for funds which meet these criteria is due to liquidity; A super fund is to be run for the sole purpose of being able to provide retirement benefits to its members, but can struggle to meet that requirement if the majority of the fund’s value is tied up in a single asset, such as a property.
The ATO are providing requirements to auditors to be included in the next audit review for these funds, so there will be a higher level of scrutiny applied with regards to diversification of investments. You can read the ATO’s announcement can be read on their website.
It’s a great time for trustees to chat with their financial advisers to go over any concerns they may have and to discuss and review the investment strategy for their fund.
If you have any questions around this, or need any assistance, please get in touch or call on 1800 24 23 22 to discuss.
The information contained in this article is factual and based on our understanding of the legislation. This should not be considered financial advice, as no personal circumstances have been taken into account. If you require financial advice, please speak to your financial adviser. If you do not have a financial adviser, please feel free to contact us and we can put you in contact with someone who may be able to assist.