Compliance activities and associated punitive measures applied by the ATO over recent years have revealed the SMSF sector is in very good shape and with few problems.
“[On average, the funds we make non-complying every year] is actually less than 100, I think it sits around 60 roughly each year, and once again when you think there are almost 600,000 SMSFs that’s a very, very small number that we do actually make non-complying,” ATO superannuation assistant commissioner Kasey Macfarlane said.
“In terms of trustee disqualifications that figure is slightly more so it sits at around about 600 trustee disqualifications a year,” she added.
In regard to applying the most severe penalty to trustees, Macfarlane revealed there were some readily identifiable circumstances often present that would lead to this course of action.
“We will disqualify those that are already operating an SMSF where there have been significant persistent and deliberate regulatory breaches, so not honouring their regulatory obligations meaning we need to exit them out of the system,” she said.
“The other instance where we disqualify trustees is at the registration stage. So where someone goes to establish a new SMSF we undertake various integrity checks, and where past compliance behaviour in relation into their own income tax affairs or related entities and/or other behaviours indicate they shouldn’t be in the SMSF system, they will also be disqualified at that stage.”
Of the average 600 trustees disqualified per year Macfarlane said around half were excluded from their trustee status during the establishment period.
While the number of trustees disqualified per year averaged 600, she admitted a further 800 had restrictions placed on them every year that had compliance breaches but were in a situation where the infringements were not serious enough to warrant elimination from the SMSF system.