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Pardeep KUMAR

Apr 16, 2024

Reg 8.02b breach

in SMSF Technical Forum

I am audting a SMSF for 2021 & 2022 year. The fund is in 100% pension mode. The funds owns a residential property, which is rented to third party. In financials, the value of the property is $185,000. Whereas I did Core Logic (property hub) valuation, the current valuation is $350,000. I ask the trustees to amend the valuation in financials. But, this will breach the minimum pension payment for 2021 & 2022. As the trustee have withdrawn minimum pension as per the assets of the funds. Therefore, I am in an opinion to lodge ACR with breach of Reg 8.02b and qualifiy Part A & Part B of financials.

Any other breach?

Please advice.

2 comments

Comments (2)

THE AUDITORS INSTITUTE

Apr 16, 2024

Hi Pardeep

My view is that the only section or regulation that you would be qualifying on is SIS Regulation 8.02B that requires per the audit report that:

"When preparing accounts and statements required by subsection 35B(1) of SISA, an asset

must be valued at its market value".

At question 19 (other regulatory information) of the Auditor Contravention Report you could consider raising your concern that as the accounts have not been done at market value your concern is that in effect minimum pensions have not been paid in accordance with SIS Regulation 1.06.

It would be great to get other members views as to how they would deal with such a breach of SIS.

Thanks

The Auditors Institute

Pardeep KUMAR

Apr 17, 2024

Replying to

Thanks a lot!