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QSuper confirms ATO audit over derivatives scheme


QSuper has confirmed that it is being audited by the Australian Tax Office but disputed reports the audit was related to a scheme worth about $200 million.

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The fund has also won an unrelated Supreme Court case that will allow it to charge its members a fee to pay any fines imposed on it by regulators.

The Australian Financial Review reported that the ATO audit related to a tax strategy involving derivative transactions which allowed an investor to claim dividends and franking credit income from shares despite not having any economic exposure to the underlying shares.

QSuper’s annual report published on Thursday said the audit was begun almost a year ago and was related to derivative instruments held by QSuper over the 2015 to 2021 income tax years. 

“The tax audit is ongoing and at the time of writing, the ATO has not provided QSuper with new tax assessments or position papers indicating that further tax may be due,” the report said.

“The taxation issues involve complex considerations that are highly dependent on their facts. QSuper has consistently acted in accordance with tax advice and believes the position it has adopted is reasonable.’’

The fund said that it was in ongoing communication with the ATO over its affairs. 

“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. 

“QSuper, however, has always conducted its tax affairs like all its business in the best interests of members prudently and within the law,’’ it said

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

“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 has a strong record of compliance. In the past five years, it has incurred just one administrative penalty (of $35,481 in May 2019) which would need the support of such a fund.’’

In relation to the Supreme Court decision, QSuper said it confirmed the trustee was justified in amending the trust deed to raise a fee as a prudent response to recent legislative changes.

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