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SMSF’s under scrutiny for ‘loose’ loans

The ATO has reiterated it will be investigating self-managed super fund members who have an estimated $600 million in related-party loans for shares and property in their funds.

Some members are taking out loans with a related party, which refers to friends, associates or family, on terms more favourable than what might have been attained from a bank. The tax office is concerned that these loans are not being made and maintained on a strict commercial basis and so, are breaching regulations. The ATO is willing to assist members who are caught up in such arrangements and resolve any issues.

There are certain characteristics that can help lenders identify these inappropriate loans:

– no compensation.

– no repayments.

– a single lump sum when the loan term ends.

– the loan amount provided for 100 per cent of the value of the assets purchased.

– the lender has not sought personal guarantees from the members of the fund.

Posted on 22 June '15 by , under Super.

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Amnesty means that 24,000 businesses own up to underpaying Aussies superannuation

An amnesty scheme which ended earlier this month has caused around 24,000 businesses to admit to underpayment of their worker's super. A total of 588 million dollars will be distributed to almost 400,00 individuals.

The scheme, which covered payments from the introduction of super in 1992, gave employers the opportunity to come clean without any consequences as long as they paid the unpaid super as well as 10% interest for every year the money was overdue.

The ATO will be directing its attention at any businesses that did not admit fault and these businesses will face severe penalties.

Many individuals are looking to access their superannuation early in order to have support during these times. Although there is criticism of early access to super, this facility has been helpful to many families to keep afloat.

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