POWERED BY MOMENTUM MEDIA
Federal court fine sets new SMSF benchmark
A self-managed superannuation fund (SMSF) trustee who it has been suggested used his fund as a personal ATM has been fined $40,000 in the Federal Court.
Specialist financial services law firm, Townsends Lawyers has pointed to the case in which the trustee was fined $40,000 for 30 separate breaches of Superannuation Industry (Supervision) Act (SIS Act) and ordered to pay costs amount to $14,000.
It said a Trustee of the Felix Super Fund had, over a number of years, borrowed from his SMSF — sometimes repaying the borrowed amounts and then re-borrowing them.
The Townsends analysis said that, effectively the SMSF had been treated as a personal ATM and that while the Trustee attempted to disguise some of the borrowings an auditor contravention report had seen the Australian Taxation Office (ATO) select the fund for audit which had revealed the extent of the borrowings.
It said that as a result, the court held that there had been contraventions of the sole purpose test and the in-house asset provisions.
Townsends said the relevant factors taken into account by the Court were the repetition and consistency of the contraventions, the attempt to disguise some of the borrowings, and the Trustee's awareness that the borrowings were in breach of the SIS Act.
It said that balancing these factors were the Trustee's co-operation with the ATO and the fact that he had personal issues.
The law firm noted that the case set a new benchmark for Trustee fines.
Recommended for you
A recent NSW Supreme Court decision is an important reminder that while super funds may be subject to restrictive superannuation and tax laws, in essence they are still a trust and subject to equitable and common law claims, says a legal expert.
New research from the University of Adelaide has found SMSFs outperformed APRA funds by more than 4 per cent in 2021–22.
The SMSF Association has made a number of policy recommendations for the superannuation sector in its pre-budget submission to the government.
ASIC has sentenced former director Mudasir Mohammed Naseeruddin over four years imprisonment for ‘egregious conduct’ and dishonestly obtaining client funds from six investors’ SMSF accounts.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI First Close USD
66.99 3 y p.a(%)
2
Hills International
59.27 3 y p.a(%)
3
Acadian Global Equity Long Short Class A
32.82 3 y p.a(%)
4
CFS FC Acadian Global Equity Long Short
32.44 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
32.01 3 y p.a(%)
Add new comment