Court fines SMSF trustees $20k each over lending breaches

SMSF trustees loans

15 October 2015
| By Nicholas |
image
image
expand image

Former husband and wife trustees of a self-management superannuation fund (SMSF) have been fined $20,000 each for borrowing more than $200,000 in contravention of the Superannuation Industry Supervision Act 1993 (SIS Act).

The Federal Court of Australia heard that Carolyn Robin Ryan and Joseph Ryan borrowed a total of $209,677 from the Lawryan Family Superannuation Fund, of which they were trustees, between June 2009 and June 2012, repaying just over $28,000.

The loans, which were used to cover their everyday expenses along with a line of credit relating to an unsuccessful dry-cleaning business they sold in 2007.

In a statement of claim by Australian Taxation Office deputy commissioners, Alison Lendon, the Ryans' loans breached the SIS Act, as the loans were made without the authorisation of the governing rules of the fund, the trustees failed to prepare or carry out a plan to address the excess in-house assets if the fund, and the loans were made to provide financial assistance to the respondents as members of the fund.

The court heard the ATO was alerted to the Ryans' borrowing when the fund lodged tax returns for the 2009 through to 2012 financial years, in late 2012.

On 16 October 2013, the Commissioner wrote to the Ryans asking each of them to show cause why they should not be disqualified from being trustees of super entities.

Just over a month later the Ryans responded to the Commissioner, acknowledging the contraventions, apologising for their actions, offering to rectify the contraventions and then roll-over the super benefits in the fund and close it. And in January 2014 they were both disqualified from being a trustee.

However, the Ryans did not move to rectify the contraventions, and by 1 June 2015 (when they transferred their super to a public fund), their super benefits in the fund were reduced to $6,034.20.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

Interesting. Would be good to know the details of the StrategyOne deal....

3 days 18 hours ago

It’s astonishing to see the FAAA now pushing for more advisers by courting "career changers" and international recruits,...

3 weeks 1 day ago

increased professionalism within the industry - shouldn't that say, FAR register almost halving in the last 24 months he...

4 weeks 1 day ago

Insignia Financial has made four appointments, including three who have joined from TAL, to lead strategy and innovation in its retirement solutions for the MLC brand....

2 weeks 3 days ago

A former Brisbane financial adviser has been charged with 26 counts of dishonest conduct regarding a failure to disclose he would receive substantial commission payments ...

2 days 16 hours ago

Pinnacle Investment Management has announced it will acquire strategic interests in two international fund managers for $142 million....

1 day 19 hours ago