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Oops….. looks like there are a few SMSF trustees that screwed up. That’s because the ATO disqualified a whopping 223 SMSF trustees in the September quarter. To be honest, that is a lot.
It is also surprising that there are many SMSF managed by medical professionals where financials and tax returns are not compliant. I get. Most medical professionals are busy. Most do not have the time, so put it off, and before you know it, you are a couple of years behind.
There’s more.
Because recently we have seen many threatening letters from the ATO to SMSF trustees asking them to ensure their tax returns and financials are up to date. Their view is that if you are not up to date, then that means they have concerns about your suitability to be a trustee.
The 223 disqualified trustees from the September quarter have now been added to the disqualified trustees register, which is not a good look. Do not be surprised if you make it to that register; you will make it to another register that says ‘Audit Me Please.’
It’s like being at school where the school bully pins a note on your back that says ‘kick my a**e’. Because you know that every kid in the school will kick you, so, just think about it for a second. Because if you happen to be on the register where the ATO thinks you are unsuitable, do you really think they are going to give you a free lemonade on a hot day?
Knowing how they work, I don’t think so.
The ATO has also said it would continue to take firm action against trustees who persistently failed to meet their obligations and seriously breach the superannuation laws. And I think they are being serious. And to be honest, they do not care if you are a car mechanic or a medical professional.
A couple of years ago, I had a medical professional who said he was unable to comply with ATO matters because, in his words, ‘he was too busy saving lives’. Well, according to the ATO inspector I was dealing with, he did not care if my client was the health minister. As a general rule, when it comes to Superannuation, the ATO rarely gives out favours to trustees unless they have been co-operative.
If a trustee has breached the superannuation laws, the ATO recommends they rectify the contravention as soon as possible, or it could put their retirement savings and fund’s complying status at risk. In other words, the fund could end up paying 45% tax rates. Ouch.
Sometimes, SMSF trustees are not aware of all the rules. They may have broken some of the rules.
For example, it is not uncommon for medical professionals to withdraw funds from Superfunds when they should not have.
We have found that the ATO is much more approachable when told something has gone wrong and that you have a plan to fix it than do nothing only for the ATO to find out and then take drastic action.
It often makes sense for trustees to use the ATO’s SMSF early engagement and voluntary disclosure service so that they are aware of what is happening.
We also know that the ATO rarely takes dramatic action if they are informed of voluntary contraventions before the ATO commences an audit and take that into consideration when applying fines.
This is what we do know. The ATO take very seriously Superannuation breaches. You may believe that because it relates to your Superannuation, it does not matter much, but the ATO does not see it that way. That is because, according to the law, it is not your money. It only becomes your money when you are entitled to it. And that is when you formally retire.
There’s something else too. Those trustees who are not responsible for Superannuation balances usually lose tens of thousands, if not hundreds of thousands, in retirement funds.
So do yourself a favour. If you are not compliant, become compliant and then appoint someone who makes sure you remain compliant. We are not saying that just to keep the ATO away, but because it is universally known that compliant funds and trustees have more wealth than those that are not,
Having a compliant Superfund is Step 2 (taxes) and Step 7 (investments) of our 9 steps to creating more time, more income and more wealth. If you would like to know more about our 9 steps, contact Hitesh at hitesh@medisuccess.com.au or call 07 3161 9548.
