The ATO has recently undertaken a bulk correspondence campaign and written to approximately 18,000 SMSF trustees and their respective auditors.

SMSF Trustees targeted include those of funds which have at least 90% of their total investments in one asset or a single class of asset (eg. property, shares, cash). The Government is concerned that trustee may not have considered the lack of investment diversification properly and that high asset concentrations expose SMSFs to increased risk.

At GMD Advisory we have identified a key characteristic of clients that received the correspondence directly form the ATO to be SMSFs that are currently utilising limited resoucrse borrowing arrangements for property in their funds. We remind trustees that under The Superannuation Industry (Supervision) Act SMSFs must have an investment strategy that considers the investment risk, diversification, likely return and cash flows to be able to support paying future benefits to members. 

If you are an SMSF Trustee that has received this correspdonece from the ATO and would like to discuss the matter in more depth please contact our office on (07) 5628 0112.