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I am auditing a fund where the fund provided financial assistance to one of its members. The amount is only $264. The member paid benchmark interest to the fund on the loan amount but the actual loan amount was not paid as at June. There is no contravention for in house asset as it is well below 5%. But based on the fact that the benefit was provided to the member will an ACR need to be lodged irrespective of the threshold i.e. $3,000 or 5%?
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Thank you. I knew that would be the case but just wanted to make sure.
Hi Md Ashfaque
If you refer the ACR instructions example 8 at the below link the ATO gives a very similar example.
Normally an ACR would not need to be lodged as it is under the financial thresholds of $30,000 or 5% of the Fund's assets.
You should work through the ACR instructions / software as you also need to consider:
1) As at the end of the financial year, is the SMSF less than 15 months old and did the value of any single contravention of a section or regulation listed in tables 1A or 1B exceed $2,000? (OK breach is less than $2,000)
2) Have the trustees previously received advice of a contravention that they have breached again?
3) Is there an identified contravention from a previous year that has not been rectified at the time this audit is being conducted?
Thanks
SMSF AAA