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Trustee disqualifications climb to over 400

ato 850
By Miranda Brownlee
09 January 2023 — 1 minute read

SMSF trustee disqualifications have continued to surge higher in the second quarter of 2022–23 as the ATO increases its compliance focus.

The ATO has now disqualified a total of 406 individuals from acting a as a trustee or director of a corporate trustee this financial year, based on Trustee disqualification register and information published notices in the Government Notices Gazette.

For the December quarter, a total of 145 individuals were disqualified. This was a decline from the previous October quarter when 261 trustees were disqualified.

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This still represents a 61 per cent increase in trustee disqualifications compared with the previous 2021–22 year with half the income year still left.

In a recent update in December, the ATO attributed the increase in disqualified individuals to its increased compliance focus.

The ATO reminded SMSF trustees that it can disqualify and individual from being a trustee or a director of a corporate trustee of an SMSF if they don’t comply with the super law or it is concerned about their suitability to be a trustee.

“A disqualified trustee must remove themselves from the position of trustee as it is an offence if they continue to act as trustee of their SMSF. They are also unable to set up a new fund,” the ATO said.

“The information on the disqualified trustees register is publicly available and includes the individual's name, location, date of disqualification and details of the formal notice of disqualification that was published in the Commonwealth Government Gazette. This means SMSF auditors and other professionals can check to see if a trustee has been disqualified.”

Back in October last year, ATO assistant commissioner, SMSF risk and strategy, Justin Micale warned that there would be an increase in the number of trustee disqualifications due to trustees illegally accessing their super.

Non-lodgment also remains a big focus for the regulator, he said, with the ATO continuing to deploy its three strikes letter campaign.

“We have just disqualified 104 trustees who failed to respond to our first batch letters,” he said speaking at a CA ANZ conference.

“We also have a specific focus on tax agents and auditors who have their own personal SMSF lodgment obligations outstanding.

Trustee disqualifications climb to over 400
ato 850
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