Nick Sherry
The Federal Government has signalled that it will not be supporting a draconian approach on the part of the Australian Taxation Office with respect to breaches committed by the directors of self-managed superannuation funds.
The Minister for Superannuation and Corporate Law, Senator Nick Sherry, has acknowledged in a speech that while the current penalty regime limits the ATO’s options with respect to compliance, he is happy for the tax office to continue non-binding public rulings.
“The current penalty regime for SMSFs appears to limit the ATO options for addressing non-compliance,” he said.
“Generally, the application of penalties for non-complying trustee behaviour comprises the imposition of civil and criminal penalties.”
However, he said that penalties of this nature could be costly, time-consuming and harsh.
“With this in mind, should our penalty arrangements be better targeted to achieve the intended results?” he asked.
“The ATO has advised me that they will continue to provide advice to support professionals and trustees through the non-binding public rulings regime.”
Sherry nonetheless expressed concern at the state of governance with respect to SMSFs and said that he was particularly concerned about cases where people had been targeted by aggressive marketing tactics, and persuaded to establish an SMSF without being fully aware of their role and responsibilities, and the fees and charges they were likely to incur.
“It is important that financial advisers who recommend an SMSF provide effective disclosure, to ensure that people who wish to establish an SMSF are familiar with details such as the financial and time burdens, and the amount of money they will need in the fund to make it viable,” the minister said.
