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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