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SMSFR 2010/1 - DEFINITION OF A INSIGNIFICANT VALUE

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SMSFR 2010/1 advises the following as per below and we are trying to determine what is an insignifiant value in relation  to performance of service.

 

For example could we repair a wooden pailing fence at say a cost of products of $500.00 and repair it our selves without breaching Subsection 66(1)

 

 

Example 5 - performance of a service - goods insignificant in value and function

57. The following examples illustrate the performance of a service for the SMSF along with the provision of goods of insignificant value and function.

(a)   A member of an SMSF fixes taps in rental properties owned by the SMSF by replacing the tap washers. As the tap washers are insignificant in value and function the substance of the transaction is the performance of a service. (b)   A relative of a member of an SMSF is contracted to provide accountancy services to the SMSF.34 As part of that service a disk containing SMSF records is produced and provided to the SMSF. As the disk is insignificant in value and function the substance of the transaction is the performance of a service.

 

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Anonymous

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Insignificant for the purposes of Subsection 66(1) has the same meaning as in normal every day use, in other words, too small or unimportant to be worth consideration, of little value.

 

If you read the ATO examples they are making reference to goods that cost little money and therefor have hardy any value.

 

In your example "service" of erecting a fence is not insignificant, in fact the labour component of erecting any fence especially a pailing fence can have a value of almost double of the cost of the material, which would make the service significant.

 

Therefor erecting the fence yourselves would not fall within the meaning of "insignificant" and you would probably be in breach of the Act if you did it yourselves.

 

I suggest you apply for some specific advice on this issue . https://www.ato.gov.au/Forms/Request-for-SMSF-specific-advice/

 

Alternatively call 13 10 20

 

 

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Most helpful response

Anonymous

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Insignificant for the purposes of Subsection 66(1) has the same meaning as in normal every day use, in other words, too small or unimportant to be worth consideration, of little value.

 

If you read the ATO examples they are making reference to goods that cost little money and therefor have hardy any value.

 

In your example "service" of erecting a fence is not insignificant, in fact the labour component of erecting any fence especially a pailing fence can have a value of almost double of the cost of the material, which would make the service significant.

 

Therefor erecting the fence yourselves would not fall within the meaning of "insignificant" and you would probably be in breach of the Act if you did it yourselves.

 

I suggest you apply for some specific advice on this issue . https://www.ato.gov.au/Forms/Request-for-SMSF-specific-advice/

 

Alternatively call 13 10 20