The new powers, to take effect from July this year, will give the ATO the ability to fine SMSF trustees who fail to meet their regulatory obligations.
Last year, 18,000 SMSF contraventions were lodged with the ATO, of which approximately half could have incurred penalties based on the proposed new super laws, William Buck said.
The maximum penalty charged by the ATO for a contravention is $10,200.
Anna Carrabs, a director at William Buck, said many trustees don’t fully understand the strict rules governing SMSFs and unless they change their current practices, will incur significant penalties.
“Investors need to understand the full responsibilities they are taking on once they decide to establish an SMSF, and the associated demands as a trustee.
“The do-it-yourself label associated with SMSFs lures investors into a false sense of security due to the perception that it is easy to manage. This is far from the case,” she said.
“It is the trustee’s responsibility to understand what obligations are required to comply with the ATO’s super laws. If a trustee does not have the skillset, independent advice needs to be obtained to ensure penalty fees are not incurred,” added Ms Carrabs.
William Buck said it expects the ATO to scrutinise SMSFs more closely from July 1, when the new powers come into effect.