In a recent update of its Trustee Disqualification Register the ATO has indicated that a total of 250 SMSF trustees were disqualified in the 2021–22 financial year.

This is an increase of around 27 per cent from the previous 2020–21 financial year when 197 trustees were disqualified.

The Trustee Disqualification Register is a record of all individuals that have been disqualified from being a SMSF trustee since 2012.

Under super law, the ATO will look to disqualify individuals from being an SMSF trustee or director of a corporate trustee where they have contravened the rules and disqualification is the appropriate action taking into account the number, nature, and seriousness of the contraventions.

It will also look to disqualify individuals from being an SMSF trustee. This will happen where it considers that an individual is not a ‘fit and proper’ person to be a trustee or director of the corporate trustee. Which would have regard to their personal character and circumstances.

Generally, the ATO will look to disqualify you if they are concerned that allowing you to remain a trustee would present a future compliance risk or risk to retirement savings.

This may include some of the following:
      • Trustees have shown deliberate and blatant disregard for the super law,
      • The contravention can’t be rectified,
      • And the Trustee has misused the SMSF to take advantage of the low super tax rates.

The ATO also noted that there may be other reasons why a person is disqualified from being a trustee under the super law, such as where they have been convicted of an offence involving dishonesty or are insolvent under administration.

Disqualification is a decision the ATO do not take lightly, and only after considering all other enforcement actions. It can happen though, and it does have follow on consequences. The 2022 SMSF contributions 

The ATO also encourages SMSF professionals, such as accountants or auditors to check the disqualified trustee register when verifying new trustees and to make periodic checks on their existing clients also.

 

Please, if you have any concerns, please reach out to us today!
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