Under new ATO guidelines SMSF trustees who are found to have breached their statutory obligations will no longer have the ability to receive education directions in certain circumstances and will instead face harsher penalties.
This new approach was outlined today when the regulator stipulated when its staff could issue education directions to trustees or directors of a corporate trustee in “Practice Statement Law Administration (PSLA) 2026/1 SMSFs – education directions for contraventions of the Superannuation Industry (Supervision) (SIS) Act 1993”.
The guidance provided the case specific situations where the issuance of an education direction was not appropriate.
The regulator confirmed these include where “the person has previously been given an SMSF education direction; the person would already be expected to have the necessary skills and knowledge, such as an experienced SMSF adviser; the person already has a good level of knowledge of their obligations and were aware their conduct would be likely to result in a contravention.”
However, the ATO did define situations where an education direction could be given to an SMSF trustee who had breached their compliance duties.
“You may give an education direction to a person where, on or after 1 July 2014, there has been a contravention of a provision in the SIS Act (other than Part 3B) or the SIS Regulations,” the PSLA stated.
“You may reasonably believe a contravention of the SIS Act or SIS Regulations has occurred if someone closely connected to the fund (such as a trustee or approved auditor) has reported it to us and your understanding of the relevant facts and evidence is consistent with what has been reported.”
The PSLA noted while it was not possible to give a direction to someone who was no longer a trustee or director of a corporate trustee at the time the direction was issued or took on that role after a contravention occurred, those who were acting in those roles but not involved in a breach could still be issued with a direction.
“As all trustees and directors of corporate trustees are responsible for ensuring the provisions of the SIS Act and the SIS Regulations are complied with, a person may still ‘contravene’ one of the provisions even if they do not take an active role in managing the fund, [and] were not directly involved in the conduct that gave rise to the contravention,” it explained.
Individuals who fail to comply with the terms of an education direction could face an administrative penalty of five penalty units while some who does not comply with a direction by the end of a specified period would commits an offence of strict liability and face a maximum of 10 penalty units.
