SMSF Non-compliance Notice Upheld

The AAT has affirmed the Commissioner's decision to issue a non-compliance notice to a self-managed superannuation fund (SMSF) because the fund did not satisfy the definition of a 'complying superannuation fund".

Following an audit, the Commissioner determined that the SMSF was not a complying superannuation fund and issued the notice. This was because all decisions in relation to the management and control of the SMSF were made overseas.

The Tribunal found that the central management and control (CM&C) of the fund was outside of Australia for more than two years. Accordingly, the Tribunal held that the SMSF was not a complying superannuation fund.

A fund must be an ‘Australian superannuation fund’ in order to be considered a complying superannuation fund and, hence, receive concessional tax treatment.

Three conditions must be satisfied before a fund can be considered an Australian superannuation fund. One of the conditions is that the CM&C of the fund is ordinarily in Australia. If the CM&C of the fund is temporarily outside of Australia for a period of not more than two years, it will be deemed to be in Australia.

* In the Tax Office’s Compliance Program for 2009/10, it has highlighted that ensuring SMSFs satisfy the definition of an ‘Australian superannuation fund’ will be one of its focus areas