ATO has been in education phase by providing a range of publications and
CD's to explain strict SIS rules to ensure that trustees and advisors
understand their legal obligations. Issuing a draft ruling on "Sole Purpose
Test" and new requirement for trustee declaration is an attempt to ensure that
all investments in a DIY Super
Fund satisfy the sole purpose test.
Sole Purpose Test means
that the primary purpose of maintaining superannuation funds is to provide
retirement benefits to members of the fund (or their dependents in instances
where the person dies before reaching their retirement age).
Early access is a thorny issue for ATO, however, has finally been successful
in a test case to prosecute trustees in using DIY Super money for private use.
ATO in their media release said
The couple had accessed assets in the
superannuation fund before meeting any conditions of release such as retirement
or reaching preservation age.
Trustees who access their
superannuation without meeting a condition of release are breaking the law a
nd
risking their retirement savings.
"SMSFs which do not comply with the
legislation are at risk of prosecution, penalties and additional tax," Ms
Vivian said.
The trustees of a self managed
superannuation fund have been issued penalties of $30,000 and ordered to pay
$32,500 in costs for breaching the rules relating to their fund.
On 15 October 2007 the Federal Court
declared that the trustees for the Axent Group self managed superannuation fund
(SMSF) had breached superannuation legislation by selling a property belonging
to the fund and using the proceeds of nearly $150,000 to pay a private debt.
Accessing your super before you retire is only allowed in very limited
circumstances, including severe financial hardship (for this you would apply
directly to the trustee of the super fund) or on compassionate grounds (for
this you would apply directly to the Australian Prudential Regulatory Authority
(APRA)).
If you legitimately need access to some of your preserved super earlier than
when you would legitimately meet a condition of release, please read your trust
deed for further directions.
You may also be able to access your super before you retire as part of the
'transition to retirement rules.
Trust Deed. You now have access to SMSF Specialist Advisor who will answer all your technical questions online for you. Simply click the button above and start chat.