SMSF Changes On The Way
If you currently run your own self-managed super fund (SMSF) or are thinking of starting a new SMSF, then you should be aware of the Government’s proposed legislation impacting SMSF Trustees.
The legislation, which is a result of the Governments Super System Review into the governance, efficiency, structure and operation of Australia’s superannuation system, aims to address two key issues:
- Increased consequences and penalties for Trustees of SMSF
- Requirement to comply with AML/CTF Legislation
Increased SMSF Consequences
Under the proposed legislation, the Australian Taxation Office (ATO), in its role as regulator of self-managed superannuation funds, will receive additional powers aimed to increase compliance with superannuation legislation.
The key changes include:
- The ability to require a Trustee to undertake specified action to rectify the non-compliance within a specified time
- Powers to require a Trustee to undertake a specified training course within a specified time frame.
- New administrative penalties if certain provisions of the legislation are not met.
Interesting, the proposed legislation clearly states that “An administrative penalty must not be paid or reimbursed from the assets of SMSF…” meaning that the trustees must pay these from their personal assets.
Click here to view the proposed legislation.
Compliance with AML and CTF Act.
The Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) Act was introduced in 2006. Until now, SMSF Trustees have not had to comply with the requirements which are enforced on retail superannuation funds.
This amendment aims to require SMSF’s to comply with a the obligations under the AML/CTF Act, which include the requirement to collect identification of members and store certain records before transferring monies in or out of the fund.
This legislation is proposed because the flexibility of a SMSF provides greater scope for assets to be used for illicit purposes.
You can read the draft legislation here.
What This Means For You
Become an SMSF Trustee is as easy as signing the SMSF trustee declaration form. However, the obligations of such a role are often not fully understood.
While these changes are only proposed, they offer an insight into the Governments desire to increase SMSF compliance with legislation – increasing the demand on Trustees to understand the rules and regulations.
If you enjoy the benefits of running your own SMSF, but need a guiding partner to help navigate the legislative minefield and avoid common SMSF pitfall, then considering seeking the advice of an SMSF advice specialist.