It’s now more important than ever to walk the straight and narrow when it comes to your Self-Managed Superannuation Fund (SMSF). There’s a new penalty regime for trustees of SMSFs, where previously, there were no financial penalties on breaches to the fund.
2. Force the trustees to complete an education course; and/or
3. Impose a penalty on the trustees of the fund.
SMSFs can be a key part of a successful savings and retirement strategy. However, having a SMSF also brings a high level of compliance responsibility.
The ATO has the power to levy this penalty on each trustee. Where the trustee is a corporate, the penalty is issued to the company and the directors will be joint and severally liable for the debt.
In the case of a fund with individual trustees, the ATO can levy the penalty on each trustee. This means the penalty could be up to four times the penalty imposed on a corporate. E.g. where the penalty is $10,200, a corporate trustee would be charged $10,200 but a fund with individual trustees would be charged $10,200 per trustee – potentially $40,800 in total. This is one of many reasons why Corporate Trustees are recommended.
Immediate rectification of any existing breach is recommended. The new penalties apply from 1 July 2014 however breaches from prior periods can be captured if not rectified by this date.
Written by: Justine Wilson - Principal Client Adviser - 0410 659 917
