1. In a recent Taxpayer Alert [2009/8], the Tax Office has warned against arrangements currently being promoted whereby the promoter advertises the sale of a pre 1999 SMSF which has control of a related unit trust.

2. The promoters of these arrangements claim that any investments made by the SMSF into the related trust prior to the end of the transitional period of 30 June 2009 will not be included as in-house assets.

3. In-house assets are limited to a maximum of 5% of the market value of the fund's assets. The law was amended in 1999 to extend the definition of in-house assets to include an investment in a related trust, subject to transitional provisions.

4. The Tax Office has advised that the transitional provisions only apply in specific circumstances and hence the arrangements being promoted may not satisfy the transitional rules.

5. Trustees of SMSF's that are in fact subject to the transitional rules are urged to review the fund's investments and ensure that their SMSF's will remain compliant after the transitional period ends on 30 June 2009.

6. Taxpayers who are willing to provide information about people or companies who may be promoting such arrangements should call the tax practitioner integrity service on 1800 639 745.

7. Click here to access the detailed Taxpayer Alert or visit the ATO website at http://www.ato.gov.au.