Is your SMSF being administered correctly?The rise in popularity of the self-managed super fund (SMSF) has been confirmed with new statistics from the Australian Tax Office (ATO) showing numbers have reached over one million funds. Many Australians have switched to the hands on approach of a DIY fund due to the appealing factors of control and flexibility, but may be unaware of the compliance issues that come with being a trustee.

Members Alliance CEO David Domingo says some trustees of SMSFs are having trouble mastering the simple yet mundane aspects of running the fund.

“All too often we see the trustees’ who are running the fund lacking the skills or time necessary to keep a SMSF compliant, and it’s the poor management of these funds that bring about penalties,” says Mr. Domingo.

“The rules and regulations surrounding the Superannuation Industry (Supervision) Act are constantly changing and without the help from a professional service like Members Alliance, it’s difficult to keep up to date with industry changes.

“Negligence and improper dealings of your fund will no longer be overlooked or dealt with lightly, but that’s why we offer our services, to help people navigate their way through their SMSF to a comfortable retirement.”

From July 1, the Australian Taxation Office (ATO) will have new powers to reinforce the sector’s standards and prevent manipulation of the retirement fund to-be.

A number of new punitive measures will be put in place for the 53,000 members of the 27,000 new SMSFs setup last year including compulsory education courses and fines of up to $10,200 per trustee. The ATO isn’t only cracking down on existing non-compliant trustees, but new ones too, which Mr. Domingo says is fair but tough. “Those new to the DIY super fund will no longer be able to plead ignorance and unfortunately, they’ll be subject to close scrutiny in their first year,” says Mr. Domingo.

“Their behavior and performance will determine the ongoing level of monitoring from the ATO – but any mistakes made in filing returns and contribution amounts will see them labelled as a case to watch.

“Going into a SMSF unassisted is a risky move – even the most financially savvy investors need assistance and advice.”

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Aside from the ‘innocent’ mishaps, common contraventions reported by auditors include improper dealings with related parties, inappropriate loans and borrowings as well as incorrect use of limited recourse borrowing to buy property. With the new changes taking effect this year, this is the first time the ATO will be able to utilise a range of actions for both minor and major contraventions. Australians with SMSFs will be watching closely at how the ATO will hand down its new sanctions, but Mr. Domingo says trustees would be wise to ensure their SMSFs abide by all the necessary legislation to safeguard themselves against a range of new penalties. If you need help either setting up or fine tuning your SMSF, call 1300 365 731 to find out how Members Alliance can help.

www.membersalliance.com.au