This money is then used to obtain a personal or business related mortgage, which results in the SMSF assets being used to provide members with current-day benefits, the ATO stated.

“We are closely scrutinising these lending arrangements,” the ATO said. “Trustees are reminded such arrangements would breach the sole purpose test as the SMSF is being used for a purpose other than providing retirement benefits for members.”

The ATO believes the primary purpose of these arrangements is to enable individuals and any associates to use their super savings, rather than assets held outside the fund, to provide assistance to members or relatives.

Trustees have been encouraged by the ATO to seek licensed, independent advice before agreeing to invest in such arrangements.