90% of SMSFs over-leveraged into property

The Australian Taxation Office (ATO) has questioned the investment strategy of as many as 20,000 self-managed super funds (SMSFs). It states that they appear to have over 90% of their monies in one asset or one asset class, very often the property occupied by the beneficiaries of the SMSF, and that this could see them in breach of the diversification requirements of the Superannuation Industry (Supervision) Regulations 1994. From The Australian:

The tax office has written to between 15,000 and 20,000 self-managed superannuation funds saying: “Our records indicate that your self-managed super fund (SMSF) investment strategy may hold 90 per cent or more of its funds in one asset, or a single asset class.

“This means your fund may be at risk of not meeting the diversification requirement as outlined in the operating standard of the Superannuation Industry (Supervision) Regulations 1994.”

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