“The theory is that amounts in reserves don't belong to anyone, so they don't count towards anyone's transfer balance cap, or total super balance,” Ms Macfarlane told delegates at the SMSF Summit.

“From our perspective, it's too early to tell at this stage whether or not that is actually playing out in reality and there has been increases in the use of reserves, but it is relevant to note that this is another area that the ATO will be closely monitoring in the post reform environment.”

The ATO has previously stated that the use of reserves by SMSFs was a compliance focus for the ATO, and that any unexplained increases in the creation of new reserves or in the balances of existing reserves maintained by SMSFs would be “likely to attract close scrutiny”. 

Ms Macfarlane said while superannuation and taxation laws don’t prohibit or prevent the use of reserves in SMSFs, the ATO considers that there are limited circumstances where its necessary to establish and maintain a reserve in an SMSF.

“The use of reserves beyond those limited circumstances, where it may be appropriate to do so, may be an indicator that they're being used as part of broader strategies to inappropriately circumvent the new caps and limits,” she warned.

The ATO, she said, will be issuing some new guidance about the limited circumstances in which it considers it to be appropriate for an SMSF to maintain a reserve.

“We have also analysed our SMSF data holdings to identify those SMSFs that are currently carrying large amounts in reserves, and we'll shortly be contacting those SMSFs and their advisers to understand the underlying circumstances of those reserves,” she said.

“We expect that in many cases, their reserves perhaps relate to old legacy pension products, that are no longer available on the market, but as I said it's an important area that we will be continuing to monitor closely.”