Disqualified person smsf

Disqualified persons are not allowed to be the trustee of an SMSF , or to be the director of the corporate trustee of an SMSF. Continuing to be the trustee of an SMSF while being a disqualified person can result in fines or even jail time. Can a disqualified person be a trustee of a SMSF? All trustees and directors of self-managed super funds (SMSFs) must consent to their appointment and sign a declaration within days stating they understand their responsibilities. What is a SMSF member?

Check that all members are eligible to be trustees or directors. Upon registering the SMSF with ATO, it must declare that the trustee and other trustees or directors of the corporate trustee are not disqualified person. In case that a trustee is a disqualified person , the ATO will still process the registration application and any registrations for which the fund has applied.

If a disqualified person knows they are disqualified and nevertheless acts as an SMSF trustee, they will be committing an offence. However, some may not realise they are a disqualified person. This discussion covers the three main ways that a person becomes a disqualified person , and whether anything can be done.

A person who is a disqualified. A disqualified person must also immediately cease being a trustee. Company directors also have an.

The thir where the disqualified person has retire attained age or satisfied another condition of release with a nil cashing restriction, is for the disqualified person to withdraw all their benefits from the SMSF. Careful consideration should be given prior to withdrawing money from the super system, as the contribution rules are now very limited. However, once they are no longer insolvent under administration, they will no longer be a disqualified person and they can become a trustee of an SMSF again.

Disqualified by a court or regulator If the court or regulator agrees to revoke a person ’s disqualification, as per the circumstances set out in the legislation, they will not be a disqualified person from the day of revocation of the. Prior to setting up a SMSF , it is important that you check that you are not. And once you are disqualified , you can never set up an SMSF. She said under the corporate trustee structure, directors or the responsible officer of that company cannot be a disqualified. Sally has recently been involved in illegal activities and convicted of an offence involving dishonesty.

Not being aware of her obligations as a trustee, she continues her trusteeship with the SMSF. Sally’s conviction means that she is a disqualified person and she must cease being or acting as a trustee immediately. You can either roll over the disqualified person ’s benefits to a large fund or convert the SMSF into a different kind of fund by appointing an APRA-approved trustee. So as you can see, if your SMSF has a disqualified person acting as a trustee, there will be pretty serious consequences for the membership and potentially the future of the fund.

Many SMSF trustees do not understand the definition of a disqualified person. SMSF practitioners must ensure they educate all prospective trustees on the definition of a disqualified person as many are unaware of what it means and some could find they are not permitted to act as an individual or corporate trustee. Further, there is a risk that the fund could be declared non-complying, which may jeopardise the concessional tax treatment of the SMSF and cause a higher than normal rate of tax to be paid on all earnings in the fun including earnings to which non-insolvent members. The ATO can render an SMSF trustee as a disqualified person if they see it is necessary, particularly for illegal early access breaches.

There are other ways a person may become disqualified and some may not even realise they have been. Continuing to act as an SMSF trustee or director of the corporate trustee while disqualified is an offence, and further penalties may apply. An individual may also be disqualified as an SMSF trustee for not being a “fit and proper person ”. Personal character is considered along with the circumstances surrounding any. The other trustees of the SMSF must also ensure that an individual does not act as a trustee, if they know the person is a disqualified person.

Restructuring the SMSF Effectively the SMSF has six months after the person resigns as a trustee to restructure, so that it can continue to meet the definition of an SMSF. In some cases, a disqualified person may be allowed re-apply to become an SMSF member by addressing all issues related to their disqualification. Any trustee-member who becomes disqualified must immediately stop working as a trustee and notify the ATO about the situation.

Options to a disqualified person remaining in an SMSF Where a person is disqualified the two main options are to roll over the disqualified person ’s member benefits to a large (APRA) superannuation fund (e.g. an industry or public offer fund) or convert the SMSF into a small APRA fund by appointing an APRA approved trustee.