The ATO has effectively ruled, from 1 July 2017, that SMSFs can no longer create most types of reserves or have “unexplained increases” in pre-1 July 2017 reserves. In addition, the ATO has noted that it will closely scrutinise the use of reserves to manipulate the transfer balance cap or total superannuation balance measures.

The ATO has examined whether an SMSF can create the following different types of reserves:

The ATO’s view has been expressed in SMSF Regulator’s Bulletin SMSFRB 2018/1. SMSF Regulator’s Bulletins are a new ATO product which the ATO will use as an early warning on SMSF related issues that cause it concerns.

To discuss this further or for more information please contact:

Phil Broderick
Principal
Sladen Legal
T +61 3 9611 0163  l M +61 419 512 801   
Level 5, 707 Collins Street, Melbourne, 3008, Victoria, Australia
E: pbroderick@sladen.com.au                                                                                                            

Melissa Colaluca
Senior Associate  
Sladen Legal
T +61 3 9611 0161
Level 5, 707 Collins Street, Melbourne, 3008, Victoria, Australia
E: mcolaluca@sladen.com.au