In the case of The Trustee for the R Ali Superannuation Fund and Commissioner of Taxation, AAT had issued a notice of non-compliance to the Trustee of the R Ali Superannuation Fund.
The facts here are as follow
1. During the 2005 to 2008 financial years the R Ali Superannuation Fund was created at the direction of, and controlled by, Mr Ali, a registered tax agent.
2. The fund then lent the money to Alnaz Pty Ltd, a company controlled by Mr Ali. Alnaz then lent that money to members of the Fund and/or business entities in which a member of the Fund was interested.
The AAT concluded the Fund is non-compliance for the following reasons:
- 100% of the fund assets were loans to related parties; and
- The loans in some cases were not made on an arms-length basis; and
- The loans constituted financial assistance to a member or relative; and
- Personal and fund assets were not maintained separately; and
- The transactions were in breach of the trust deed and the Act.
- The fact that the trustee is an accountant leads to the conclusion that it is more than mere error
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