A little while ago now, the ATO wrote a letter to boost trustee awareness to SMSF and other trustees about their invest strategies. The reason behind this is to have the objective to raise awareness.

ATO’s Objective

This did certainly raise many questions to our offices with trustees worried when receiving any letter from the ATO.

The ATO’s objective to raise awareness of the obligation of trustees to have a diversified investment strategy was met. Many of our clients have since altered their investments to ensure compliance.

The ATO commented that “It has been encouraging to see that as a result of this campaign there has been increased awareness of this obligation under the law. While there has been a range of perspectives, the ATO believe the focus has helped raise awareness about the importance of having a complying investment strategy.”

Takeaways of the letter

The letter was purposefully issued by the ATO so that trustees would have time to make any necessary amendments to their investment strategies where needed.

The ATO also noted that while auditors will be required to lodge auditor contravention reports where they find an SMSF without an adequate investment strategy, the trustees would not automatically receive the $4,200 penalty indicated in the letters sent to 17,700 funds in late August. “In the normal course of receiving an SMSF auditor contravention report, we will contact these trustees asking them to rectify the contravention. If they do not comply with our request, a penalty of $4,200 may be imposed on the trustees”.

The message here is that the ATO are watching what you are investing in. The objective to create wealth for your retirement in a diversified manner is imperative. This is why it is important to have a strategy for your SMSF.

Do you think the the strategy of the ATO’s letter to noost trustee awareness to SMSF trustees has been effective?

If ou are worried about your particular SMSF and your investment strategy, contact our internal financial planner Daz at  [email protected].

For other queries you might have, feel free to contact us on [email protected]