The decision by the Federal Government to give the Australian Taxation Office (ATO) flexible and cost effective penalties to handle SMSFs that breach the law will ensure the system is more equitable, says SMSF Professionals’ Association of Australia (SPAA) CEO Andrea Slattery.
The announcement was made by the Assistant Treasurer, Senator Arthur Sinodinos, on Saturday [14 December] as one of a raft of 92 announced but unlegislated tax and superannuation measures.
Slattery says: “Under the current law, the system is far too inflexible the ATO only has draconian penalties to apply to SMSFs, even for minor contraventions, and these penalties simply don’t fit the crime.”
“SPAA believes most trustees only breach the law inadvertently, and that this new penalty regime reflects this to a far greater degree,” she says.
“However, trustees should recognise that there are still penalties in place for breaching the law, and, as such, the importance of getting professional advice has never been more important.”
Slattery says SPAA is broadly supportive of the measures that Senator Sinodinos announced at the weekend that will see 16 proceed and 48 cancelled or subject to review next year. [The outcome of the other 28 proposals was announced earlier.]
“However, it is disappointing to see that the proposal that was to allow the verification of SMSF bank account information by the ATO will not proceed,” she says.
“This was a recommendation of the Cooper Committee and is an important integrity measure to ensure amounts transferred from APRA funds to SMSFs are made to valid SMSF bank accounts.
“It will be important as part of the SuperStream reforms that there is an efficient transfer of money to SMSFs in accordance with the members¹ wishes to consolidate their retirement savings. SPAA will continue to advocate for this important reform in 2014.”
