SMSF trustees may soon be fined for breaches by their fund

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SMSF trustees may soon be fined for breaches by their fund

Editor:  In the ATO’s latest edition of its “SMSF News”, it cautions trustees of self-managed superannuation funds (SMSFs)about new penalty provisions that are coming into play on 1 July.

Newly enacted legislation will apply to impose penalties on trustees for contraventions occurring in their super fund from 1 July 2014.

They will also apply to contraventions that were made prior to 1 July 2014 and continue after that date.

For example, if a fund has lent money to a member or relative and the loan still exists on or after 1 July 2014, the trustee will be liable for a penalty.

Under the measures, penalties will vary according to the type of breach.  In the example above:

–   Each individual trustee would be personally liable for a penalty of $10,200.

–   For an SMSF with a corporate trustee, each director would be jointly and severally liable for a penalty of $10,200.

The penalty cannot be paid using the resources of the SMSF.

The ATO says that if trustees are making progress in resolving contravention(s) by 1 July 2014, it would consider these circumstances in any request to remit any imposed administrative penalties.


Value of one penalty unit is currently $170

 Provision of the SIS Act Penalty Units
s. 34(1) prescribed operating standards 20
 s. 35B – accounts and statements  10
 s. 65(1) lending prohibition  60
 s 67(1) borrowing prohibition  60
s. 84(1) in house asset rules  60
s. 103(1) duty to keep minutes – two or more trustees  10
s. 103(2) duty to keep minutes – one trustee  10
s. 103(2A) retention of election relating to geared investments  10
s. 104(1) record keeping  10
s. 104A(2) declaration relating to trustee duties  10
s. 105(1) member reports  10
s. 106(1) notification of significant adverse events  60
s. 106A(1) notification of change in status of an entity  20
s.124 appointment of investment manager  5
s.160(4) compliance with an education direction  5
s. 254(1) provide information to regulator  5
s. 347A(5) participation in statistics program  5


























Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.

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