MAP - October 2019 Update

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ATO Questioning SMSF’s about investment strategies

The ATO has sent letters to trustees of SMSF’s who may be holding 90% or more of their money in a single asset class. Of particular concern to the ATO are SMSF’s that have invested in property using a Limited Recourse Borrowing Arrangement.

It is allowable for SMSF’s to invest in such a way, however the ATO is concerned that the trustees haven’t given consideration to diversifying their fund’s investments which may put their fund’s assets at risk. In addition, the ATO require the SMSF’s to have prepared an investment strategy that considers all of the following requirements;

-         The diversification of fund investments

-         The risk of inadequate diversification within the context of the SMSF’s investment portfolio

-         The making, holding, realising and the likely return from their fund investments relating to their retirement objectives and expected cash flow requirements

-         The liquidity of their investments, allowing the fund to meet costs and pay benefits as members retire

-         Whether insurance cover should be held for one or more members

In summary, it is important that SMSF trustees review their investment strategy on a regular basis, and consideration has been given to matters raised above.

Product Disclaimer:

The above is general information only, and has been prepared without taking into consideration your financial information, personal needs & objectives. No investment advice has been provided to you.

Fuel Tax Credits

Fuel Tax Credit rates increased on 5th of August 2019, so don’t forget to use the new rates when calculating your claim on your next business activity statement. Access to the new rates here:

https://www.ato.gov.au/Business/Fuel-schemes/Fuel-tax-credits---business/Rates---business/From-1-July-2019/

 

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