The following breaches of the SIS Act and Regulations by an SMSF must be reported to the ATO in an Auditor Contravention Report.
Table 1A: List of reportable sections
S17A - SMSF definition
S35C(2) - Trustee to provide documents to the auditor
S62 - Sole purpose test
S65 - Lending or providing financial assistance to members or their relatives
S66 - Acquisition of assets from related parties
S67 - Borrowing by the fund
S82 - In-house assets – exceeding in-house assets ratio
S83 - In-house assets – prohibition on further acquisition
S84 - In-house asset rules must be complied with
S85 - In-house assets – prohibition of avoidance schemes
S103 - Minutes and records
S104A - Trustee declaration
S109 - Investments to be maintained on an arm’s length basis
S126K - Disqualified persons not to be trustees
Please note that some of the above SIS Act sections have statutory time periods that apply. Refer to the ATO (Table 1A) for further details.
Table 1B: List of reportable regulations
R4.09 - Investment strategy
R4.09A - Separation of assets
R5.08 - Minimum benefits
R6.17 - Restriction on payment of benefits
R7.04 - Acceptance of contributions
R8.02B - Valuation of assets (Assets to be valued at market value for the 2012–13 and later income years)
R13.14 - Charges over assets of the fund
R13.18AA - Investment in collectables and personal use assets (From 1 July 2016, all investments in collectables and personal use assets must comply with these rules, regardless of when they were acquired.)
Source: ATO - Auditor Contravention Report Instructions Table 1B
Please note that some of the above SIS Act sections have statutory time periods that apply. Refer to the ATO (Table 1B) for further details.
ATO administrative penalties for reportable contraventions
It's important to understand that some of the above listed contraventions also have administrative penalties attached which can be applied at the discretion of the ATO.
A list of contraventions that incur SMSF administrative penalties can be found here: