ATO warning regarding prohibited SMSF loans
Loans to members continue to be the highest reported contravention of the superannuation laws that the ATO sees in auditor contravention reports.
SMSF trustees should remember that they cannot loan money or provide other forms of financial assistance to a member or relative, and if they do, they can incur a penalty of up to $18,780. They may also be disqualified as a trustee.
SMSF trustees also cannot loan money to a related party, such as a business, where the value of the loan exceeds 5% of the value of the fund’s total assets, as this is a prohibited ‘in-house asset’ investment.
If the SMSF’s in-house assets exceed 5% of the total value of its assets at the end of the financial year, the trustee must prepare a plan to reduce their in-house assets to less than 5%, which must be implemented by the end of the following financial year.
If a trustee has made a prohibited loan from their SMSF, the loan must be repaid as soon as possible.
—
If you have any questions or would like to speak to one of our professional business and tax advisors, please contact our office on (08) 9392 7600 to make a booking or click here.
With three offices across Western Australia and over 20 years of experience, Acclaim Accounting is a dynamic team of highly trained and skilled individuals committed to providing innovative and effective advice, excellent service and maintaining only the highest standards in ethical professional practice.
We are thrilled to announce that Muntz Partners is now known as Acclaim Accounting. This change reflects our commitment to providing you with even better services and experiences. Stay tuned for more updates as we embark on this exciting journey together! Note: The change took effect on May 15th 2024.
Exciting News! Muntz Partners is Rebranding to Acclaim Accounting
