Measured penalties urged for SMSFs
Monetary penalties imposed against self-managed superannuation funds (SMSFs) that fail to meet their legal compliance requirements should not be so high that they wipe the funds out, according to the Taxation Institute of Australia.
In a submission to the Cooper Review, the Institute has recommended a review of the penalty regime applying to SMSFs, including the manner in which the top marginal tax rate is applied.
It said that this regime should be changed so that the top marginal rate was applied only during the financial years that a fund remains non-complying.
“If an extra monetary penalty above this needs to be imposed, then the Taxation Institute has suggested that it be in line with having a deterrent effect, but not a punishment so large that it wipes out almost half of a taxpayer’s retirement savings,” the submission said.
The Institute said that the monetary amount could be in the order of about $10,000 to $20,000 or based on a scale of the assets in the fund.
AUTHOR
Mike Taylor
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