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Increase in penalties for breach of SMSF Trustee Obligations

SMSFs account for 99.7% of all super funds in Australia and collectively hold 26% of the $2.9 trillion in super assets under management. There are 1.125 million Australians in nearly 600,000 SMSFs with an average fund balance of $1.3 million and a median fund balance of $720,000.

Recent data suggests that the number of SMSF registrations has been increasing and the growth in registrations over the past year is expected to continue due to the economic impacts of COVID 19, as some members choose to establish SMSFs to enable greater control of their retirement savings. 

SMSFs are typically made up of a couple with an average of 1.9 people in a SMSF.  SMSF members must be trustees or directors of a trustee company and it is imperative that each member remain active in ensuring compliance with their trustee obligations – this includes, circumstances of relationship breakdown.  Apart from the obvious financial consequences flowing from poor investment management, fraud, and the SMSF becoming a non-complying fund, active and passive trustees may become liable for criminal penalties.  On 1 July 2020 the penalties increased by 5.74%. 

So, if you are separated from your spouse or partner and you are a member and trustee of your SMSF, stay engaged in the fund’s management and operation until resolution of your property settlement enables you to secure its sole control, or you are in a position to roll out your interest to another complying fund.

Liability limited by a scheme approved under Professional Standards Legislation

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