New rules for trustees of SMSFs

The ATO has issued a reminder that new regulations apply to self-managed superannuation funds (SMSFs) from the 2012/13 income year.

They require trustees of SMSFs to:

• value the fund's assets at their market value for the purpose of preparing financial accounts and statements of the fund;

• consider insurance for their members as part of the fund's investment strategy; and

• review the fund's investment strategy on a regular basis

• Trustees who fail to comply with these requirements may be subject to penalties.

ATO given more powers to deal with non-compliance

Trustees have always been required to keep the money and other assets of the SMSF separate from those held by the trustee personally (or by a standard employer-sponsor or an associate of a standard employer-sponsor).

A regulation has now made this requirement an 'operating standard', which means the ATO now has the power to enforce compliance.

Contravention may result in a fine of up to 100 penalty units.

Editor: Penalty units were recently increased from $110 to $170 per penalty unit; therefore, e.g., 100 penalty units would equal $17,000 (up from $11,000)!