The ATO has cautioned 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.
