SMSF Penalty Increase

10 Jan 2023

Written by

David Busoli, Principal

The dollar value of ATO penalty units has increased from 1st January so SMSF administrative penalties have increased accordingly.

Penalties have increased, over the years, as shown below.

Date of InfringementUnit Value
From 1 January 2023$275
1 July 2020 – 30 December 2022$222
1 July 2017 – 30 June 2020$210
31 July 2015 – 30 June 2017$180

This means that the maximum administrative penalty rises to $16,500. It applies to breaches of the lending, borrowings and in-house asset rules. Such penalties are issued against the trustees personally and cannot be paid by the fund. Furthermore, though they are levied on directors as a single penalty to be paid jointly and severally by all directors, they are issued to all individual trustees individually. Given that there may be up to 6 SMSF members/trustees the difference between a corporate trustee ($16,500 penalty) and individual trustees ($99,000 penalty) is eye watering and represents a compelling argument for SMSFs to utilise a corporate trustee.

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