If your auditor has highlighted any breaches or issues in previous year fund audits, you should review and rectify these issues by 30 June.

Where super funds with compliance issues fail to rectify these, the ATO has a number of powers to address the non-compliance.  These include:

  • Education directions – require the trustee/director to complete an ATO approved education course within a specific timeframe. An administrative penalty of $2,100 applies for non-compliance.
  • Rectification directions – requiring the SMSF’s trustee/director to take specific action to rectify the contravention within a specific timeframe.
  • Administrative penalties – penalties from $1,050 to $12,600 apply to specific breaches. Each individual trustee is liable for the penalty and directors of a corporate trustee are jointly and severally liable. The penalties are payable by the trustee/ director and not refunded by the SMSF.
  • Informal arrangements to rectify minor breaches.
  • Enforceable undertakings.
  • Disqualification of a trustee.
  • Allowing the SMSF to wind up.
  • Notice of non-compliance.
  • Freezing an SMSF’s assets.
  • Civil and criminal penalties where the fund:
    • Breaches the sole purpose test.
    • Lends to members of the fund.
    • Breaches the borrowing rules.
    • Breaches the in-house asset rules.
    • Enters into prohibited avoidance schemes.
    • Fails to notify the regulator of significant adverse events.
    • Breaches the arm’s length rules for an investment.
    • Promotes an illegal early release scheme.

These powers also enable the ATO to look back to any breaches from previous years that were unresolved at 30 June 2020.