In a recent address to the Tax Institute National Superannuation Conference, the ATO indicated they will be looking at the both individual and business compliance practices of SMSF trustees alongside their SMSF.
Trustees with a poor compliance history may be more likely to have their SMSF scrutinised by the ATO. Examples of this may include poor lodgement history and participation in aggressive tax planning schemes, particularly those involving the SMSF. In some circumstances the ATO may disqualify individuals from being a trustee if they consider the individual not to be a ‘fit and proper person’, the consequence of this being the individual will no longer be able to act as a trustee and therefore be a member of an SMSF.
Kasey MacFarlane, ATO Assistant Commissioner, also reminded trustees that “The sole purpose of an SMSF is to provide retirement benefits for members. Those people looking to ‘play the system’ and receive a present-day tax benefit in their personal or business affairs are on notice: regulatory and income tax breaches related to the same transaction or arrangement will no longer be treated in isolation”.
Where trustees and advisers are concerned about a possible contravention, the best practice is to take steps as early as possible to rectify the issue. “Taking early and immediate steps to rectify issues not only serves to limit or prevent financial detriment to a members’ retirement savings, but is also likely to lead to a more favourable outcome in terms of any enforcement action by the ATO,” said Ms MacFarlane.
For more information on the ATO’s new administrative penalty regime, click here.
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