New SMSF penalty regime actually welcomed

The Coalition has reintroduced The Superannuation Legislation Amendment (Reducing Illegal Early Release and Other Measures) Bill into parliament, with a revised start date of 1 July 2014.

If it is passed, the legislation will implement a new ATO penalty powers regime and has been welcomed by the SMSF sector.

Before now the ATO only had limited options when an SMSF contravened the law.  The options were to:

  • make the SMSF a non-complying fund,
  • disqualify the trustee,
  • apply to court for a civil penalty or
  • require the trustee to enter an enforceable undertaking.

Often these penalty actions were out of proportion to the breach of the superannuation laws.

SMSF commentators support the new regime because as it allows for a fairer response to smaller breaches.  The idea behind these new penalties is to give the ATO an easier way to take action against a trustee, rather than the heavy handed responses that they were limited to in the past.  The ATO would now have an ability to work with the trustee to resolve an issue.

If you want to know more details, call us on (03) 9585 7555 or email Noel

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