“As the audit is ongoing and is not expected to complete for some time, QSuper is not in a position to comment on the amount speculated on in The Australian Financial Review today or to speculate on possible outcomes of the audit,” a spokesperson said.

According to the fund's annual report, on 18 November 2020, the ATO commenced a tax audit in relation to derivative instruments held by QSuper over the 2015 to 2021 income tax years. 

"The taxation issues involve complex considerations that are highly dependent on their facts," QSuper said. 

"QSuper has consistently acted in accordance with tax advice and believes the position it has adopted is reasonable."

The AFR  has, however, suggested the audit could result in a “record penalty”, to be footed by members.

According to AFR, multiple sources have confirmed that a tax strategy was employed that allowed investors to claim dividends and franking credit income from shares without economic exposure to the underlying shares. This, it says, is about to trigger a tax re-assessment from the ATO.

But, in a statement sent to sister brand, InvestorDaily, QSuper maintained that the ATO has not at this stage confirmed there will be a re-assessment or given an indication of the likely quantum of taxes or any penalties if it was re-assessed.

“QSuper has always conducted its tax affairs like all its business in the best interests of members prudently and within the law,” the fund said.

“Any tax arrangements it has made and its response to audit has been based on the best available professional advice.”

But what’s interesting is the timing of the audit’s outing. Namely, on Wednesday, the Supreme Court of Queensland declared QSuper could impose a new fee on members in order to pay any regulatory penalties or fines.

In Thursday's statement, QSuper said the Court declared the trustee is “justified” in amending the trust deed to raise a fee as a prudent response to recent legislative changes.

“This will support the ongoing financial resilience of the trustee and its ongoing ability to perform its duty to manage the fund in members best financial interests,” QSuper said.

Also on Wednesday, the super giant announced it was on track to merge with Sunsuper to create one of Australia’s largest superannuation funds, managing more than $200 billion in retirement savings for 2 million members.

The merger is considered one of the biggest and most complex in Australian superannuation history.