A recent Administrative Appeals Tribunal (AAT) case upholding the disqualification of a director of a corporate trustee of an SMSF has proven the value of maintaining good client records, according to a specialist legal firm.
DBA Lawyers said the recent case of Goulopoulos and Commissioner of Taxation (2022), in which Andrew Goulopoulos sought to overturn a disqualification made by the ATO in August 2019, provided important warnings for advisers and trustees or directors of trustees.
In a recent post, authored by DBA Lawyers special counsel Bryce Figot and lawyer Cassandra Hurley, the legal firm noted the case related to, among a number of issues, illegal early access.
During the hearing, the AAT was told Goulopoulos relied on advice from his accountant in relation to 18 withdrawals from the Goulopoulos Superannuation Fund, totalling $665,990.86, but Figot and Hurley said claiming to have acted on expert advice does not prove compliance with a trustee’s duty to comply with SMSF operating standards.
“In this case the AAT considered whether the applicant [Goulopoulos] had received advice from his accountant that explained the withdrawals,” they said.
“This underscores to professionals the importance of preparing themselves so as to be able to give ‘resolute’ reports of advice and client interactions. This was relevant as there was some question as to whether the transactions were loans or withdrawals.”
They noted that by the 2018 financial year, Goulopoulos owed his fund a total net debt of $819,721.87 and wrote off that debt, but the AAT did not consider the net withdrawals to be loans.
“The applicant said that the accountant told him that ‘5 per cent of super is considered junk’ and that he could use that for his own use, ‘but replace it in the same year’,” they said.
Quoting from the case records, they said the tribunal noted the accountant “denied he ever told the applicant any such thing, but was confident that no one in his firm would have told the applicant that”.
“[The accountant] struck [the AAT] as resolute, professional and honest. Having seen and heard both the applicant and [the accountant] give evidence, [the AAT was] satisfied that [the accountant’s] evidence is to be preferred,” they said.
The AAT affirmed the ATO’s decision to disqualify the applicant and his wife and held that the applicant “knew what he was doing was wrong [and that there] was no necessity for his conduct”, they said.
