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: