The Australian Taxation Office (ATO), as self-managed super funds (SMSFs) regulator, has recently announced it will contact approximately 17,700 SMSF trustees in relation to their investment strategy. This is due to growing concerns that some SMSFs are invested in an overly concentrated manner, typically with real property.
The ATO statement can be found here.
The ATO is questioning whether these trustees have been developing and implementing an investment strategy as required under SIS regulation 4.09. The regulation requires trustees to consider the following when developing their investment strategy.
- The risks involved with, and potential return from, investments.
- The level of diversification within the SMSF’s investments as a whole.
- The liquidity of the SMSF’s investments.
- The ability for the fund to meet its liabilities.
- Whether the fund should hold insurance for the benefit of its members.
As part of this process, the ATO will be asking trustees to review and clearly document their investment strategy.
If you have any questions about this please get in contact with us.