New ATO Penalties for SMSFs

The ATO have a new arsenal of weapons for SMSFs that fail to follow the rules.

For contraventions that occur after 1 July 2013, the table below shows the (massive) fines applicable PER trustee. That is if you have two individuals as trustees you can double the amounts shown.

A huge incentive to get your paperwork up to scratch, and avoid accidental payments into or out of your SMSF bank account.

Section & Rule Administrative Penalty
s.35B – failure to prepare Financial Statements $1,700
s.65 – prohibition on lending or providing financial assistance to members & their relatives $10,200
s.67 – prohibition on super fund borrowing, except as permitted, eg limited recourse borrowing arrangement $10,200
s.84 – contravention of In-House Asset rules $10,200
s.103(1) & (2) – failing to keep trustee minutes for at least 10 years $1,700
s.103(2A) – failure to maintain a s.71E election, where applicable, in relation to a fund with an investment in a pre 11/8/99 related unit trust $1,700
s.104 – failing to keep records of change of trustees for at least 10 years $1,700
s.104A – failing to sign Trustee Declaration within 21 days of appointment and keeping for at least 10 years $1,700
s.105 – failing to keep member reports for 10 years $1,700
s.106 – failing to notify ATO of an event that has significant adverse effect on the fund’s financial position $10,200
s.106A – failing to notify ATO of change of status of SMSF, eg fund ceasing to be a SMSF $3,400
s.124 – where an Investment Manager is appointed, failing to make the appointment in writing $850
s.160 – failing to comply with ATO Education directive $850
s.254(1) – Failing to provide the Regulator with information on the approved form within the prescribed time upon establishment of the fund $850
s.347A(5) – Failing to complete a form with requested information provided by the Regulator as part of the Regulator’s Statistical Program $850
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