A number of SMSF trustees have been hit with fines from the ATO following breaches to the Superannuation Industry (Supervision) Act. The recent crackdown is the result of a number of trustees of SMSF who are dipping into their superannuation funds for personal use. Audits which uncover non compliance to the SIS Act could have serious consequences to the trustees involved, such as various fines being imposed by the Federal Court and the SMSF being wound up.
SV Partners have provided assistance in several matters where trustees have been found to be in breach of the SIS Act. The outcome of one matter was that the funds which had been removed from the fund had to be repaid over a specified period of time. The existing SMSF was wound up and the balance of funds transferred to a complying fund. In another matter, where there was a Corporate Trustee involved, the entity had to be wound up entirely.
In September 2015, the matter of Deputy Commissioner of Taxation (Superannuation) v Ryan FCA1037 saw the Federal Court impose $40,000 of fines to be paid over 3 years upon the Trustees of a SMSF. The Ryans were the trustees, and the only members, of the Lawryan Family Superannuation Fund. It was found that over a 3 year period, the Ryans withdrew nearly $210,000 leaving a minimal balance and they were deemed to have committed contraventions of ss 62(1), 65(1), 84(1), and 109(1) of the SIS Act.
SV Partners Advice
In the event of an ATO Audit, SV Partners recommend that SMSF trustees take a proactive approach to ensuring compliance with the national regulator. If you or your client is in the situation where a SMSF needs to be formally wound up as a result of non compliance, please contact one of our expert advisors on 1800 246 801.