Titled ATO audits and reviews of super funds in 2014, the speech was given last week to the Tax Institute National Superannuation Conference by the ATO Assistant Commissioner for Public Groups and International, Peter O’Reilly. Though the speech was aimed at APRA funds, much of it is also relevant for SMSFs.
- 1 – if the SMSF is in business does this breach the Sole Purpose Test, and
- 2 – if the SMSF is in the business of share trading as opposed to investing in shares can the fund claim deductions for losses against other income
The Sole Purpose question is a topic for another day, however there is an answer to the second question, or really the answer is moot as the legislation does not allow (with some exceptions) SMSFs to claim deductions for losses on investments on revenue account.
Section 295.85 of the ITAA 97 applies to SMSFs, along with other types of superannuation funds. The effect of this section is to exclude a number of other sections from applying to a CGT event, including: