A Must Read for SMSF Trustees
It is now confirmed that the new Penalty Regime for SMSFs will apply to contraventions that occur or are unrectified from 1 July 2014.
The new Penalty Regime will provide the ATO with greater flexibility when dealing with a Fund’s non-compliance with the law, including the power to:
- Issue rectification and education directives to trustees of SMSF; and
- Impose administrative penalties for trustees for certain contraventions of the SIS Act.
The below table is a summary of the administrative penalties that can be imposed on trustees.
The penalties are applied to each Trustee separately and the Trustee cannot reimburse themselves from the assets of the Fund. For instance, if an SMSF has two individual trustees that have lent money to themselves, they can be fined $10,200 each. However, if those two individuals were directors of a Corporate Trustee, it would be the Company that receives one $10,200 fine.
We recommend that if you are aware of any outstanding contraventions, that they be rectified by 30 June 2014 to avoid the below penalties. In addition, if you are unsure whether there is a contravention, please don’t hesitate to contact us.