Note: Every year, the ATO publishes the top compliance mistakes made by SMSF trustees. This article contains data up to 30 June 2017 (latest available as at December 2018). The next update, for compliance data up to 30 June 2018, will be available in January 2019.
The ATO has published the top 10 compliance mistakes that SMSF trustees make when running their self-managed super funds. The list in the table below is based on the general type of contraventions reported by SMSF auditors since the start of contravention reporting in 2004 (and up to 30 June 2017).
The percentage of the SMSF population with auditor contravention reports (ACRs) is approximately 2% of all SMSFs each year, according to the ATO. In the year ended 30 June 2016, there were 7,600 SMSFs that had ACRs lodged with 14,800 contraventions, with just under half (48%) of these contraventions reported as rectified.
An interesting observation to make from the top 10 compliance mistakes is that 3 types of contraventions represent more than two-thirds (67.6%) of the value of assets involved in the top 10 contraventions, namely:
- In-house assets (28.2%)
- Separation of assets (24.5%)
- Loans to members/financial assistance (14.9%)
While just under two-thirds (63.6%) of all contraventions, when looking at number of breaches, involve only 4 types of contraventions, namely:
- Loans to members/financial assistance (21.4%)
- In-house assets (19.1%)
- Separation of assets (12.8%)
- Administrative-type contraventions (10.3%)
Note: For more information on what these contraventions mean in practical terms for SMSFs, see SuperGuide article SMSF compliance: 12 most common mistakes made by trustees.
Types of contraventions reported to the ATO (up to 30 June 2017)
|Contravention types||Number (%)||Value (%)|
|Loan to member/financial assistance||21.4%||14.9%|
|Separation of assets||12.8%||24.5%|
|Operating standard-type contraventions||7.5%||6.2%|
|Investment at arms length||7.6%||7.8%|
|Acquisition of assets from related parties||1.2%||2.3%|
Note: The column titled ‘Number %’ means the percentage of contravention reports that involved this particular type of breach, while the column titled ‘Value %’ relates to the value of assets involved in this particular type of breach.
Source: Self-managed superannuation funds: A statistical overview 2015-2016.
For an explanation of the rules mentioned in the top 10 list above, and what happens if your SMSF commits one of the SMSF boo-boos see the following SuperGuide articles:
- SMSFs for Beginners: Trish’s 10 commandments of DIY super
- SMSF compliance for super beginners
- Special SMSF investment rules: A starting guide
- SMSF compliance: Is your fund due for a super service?
- SMSF trustees face big penalties: 2018/2019 guide
- SMSF compliance: Administrative penalties hit hard for misbehaving trustees
- SMSF compliance: ATO’s hit list for the 2018/2019 year