SMSF trustees beware

The Tax Office is once again clamping down on SMSF trustees who do the wrong thing, says Taxpayers Australia.

In the Government Gazette dated February 12, 2015, the Tax Office announced that it had disqualified four SMSF trustees for breaching the Superannuation Industry (Supervision) Act 1993 (SIS Act) requirements.  This adds to the 585 SMSF trustees disqualified in 2014.

“We are definitely seeing the ATO ramp up its surveillance of the SMSF sector,” says Reece Agland, Head of Superannuation at Taxpayers Australia, “and we are also seeing that they are not scared to disqualify SMSF trustees.

“In the past, the ATO undertook an educative approach to enforcement, only disqualifying trustees for the most egregious breaches of the SIS Act,” he says. “Now they are taking a tougher line, and trustees must be aware of this.”

Not only is the Tax Office disqualifying more and more trustees, the courts are also taking action against trustees who breach the SIS Act.

“We have also seen more vigilance in the courts,” Agland says. “In one recent case the SMSF made 80 loans to the members totalling $134,418. The money was used to purchase items including a caravan, stud cattle and motor vehicles.

“These represented clear breaches of sections 62, 65, 84 and 109 of the SIS Act.  The trustee was fined and had to pay penalties amounting to $50,000.  The trustees involved were also disqualified as trustees,” he says.

To help trustees avoid these problems, Taxpayers Australia has just published The Ultimate SMSF Trustees Guide. “If trustees read and follow the guide, they should have no problems from the ATO or the courts,” Agland says.