What has changed?

Important to note that the dollar value of ATO penalty units has increased from 1st January 2023, so SMSF administrative penalties have increased accordingly.

 From 1st January 2023, the value of a penalty unit is $275.

 This means that the maximum administrative penalty rises to $16,500 (60 units). You can view the list of contraventions to the Superannuation Industry (Supervision) Act 1993 (SISA) and associated penalties here.  

Who is liable to pay the penalty?

What may come as a surprise, the penalty cannot be paid or reimbursed from the assets of the fund.

Directors of corporate trustees are jointly and severally liable for the penalty. Individual trustees are each liable for the penalty.

Strategy consideration

As there may be instances where an SMSF has up to 6 SMSF Individual Trustees, the difference between a corporate trustee ($16,500 penalty) and the combined penalties of 6 individual trustees ($99,000 penalty) is considerable. 

If you haven’t already considered the benefits of a corporate trustee, then this may be an opportunity to revisit your options.

Thanks for reading, and if you want to discuss your SMSF trustee options, then please book a chat here.