In past issued we have warned of the crackdown on SMSFs and in a recent case the trustees of a self managed superannuation have been issued penalties of $30,000 and ordered to pay $32,500 in costs for breaching the rules relating to their fund.
On 15 October 2007 the Federal Court declared that the trustees for the Axent Group self managed superannuation fund (SMSF) had breached superannuation legislation by selling a property belonging to the fund and using the proceeds of nearly $150,000 to pay a private debt.
The couple had accessed assets in the superannuation fund before meeting any conditions of release such as retirement or reaching preservation age.
The main purpose of SMSFs is to provide for retirement. Trustees who access their superannuation without meeting a condition of release are breaking the law and risking their retirement savings.
The Tax Office provides a range of educational material to ensure trustees are aware of their roles and responsibilities.
It's vital SMSF trustees make sure they understand their legal and regulatory obligations as they are legally responsible for managing their fund.
Accordingly to the ATO, SMSFs which do not comply with the legislation are at risk of prosecution, penalties and additional tax.
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