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Anna Han Willetts

Apr 21, 2022

Rental expenses suspected to be purchased for private use

in SMSF Technical Forum

I am auditing a SMSF (both trustees/members are residing in Sydney Northern Beaches) with a Brisbane city apartment leased out via a local agent. During FY2021, there are $5K furniture and household items purchased as second hand goods from moving overseas sale, therefore cash receipts only with no ABN and no seller can be contacted as they are overseas now. A $1,400 new fridge purchased from Harvey Norman Gordon NSW with invoice. There are some other cash receipt for repairs.

I suspect the above purchased items are for the members own place in Sydney. My question is what further evidence I can ask to prove the $5K and $1.4K fridge are actually purchased for the Brisbane apartment? Can I ask how these items were delivered to Brisbane from Sydney?

Thanks

Anna

2 answers0 replies

Comments (2)

THE AUDITORS INSTITUTE

Apr 26, 2022

Hi Anna

Yes I agree with Nicole re requesting a photo showing the items purchased.

Yes you can ask how they were delivered as if purchased in Sydney you would expect that the Fund has incurred delivery costs to transport them to Brisbane. If purchased from Harvey Norman NSW they may have been able to get a Queensland store to deliver the item.

In such a situation I would request a declaration from the Trustees that the items are in relation to the Fund. You may also be able to get confirmation from the estate agent that the items purchased are in the apartment.

Thanks

SMSF AAA