ATO Trustee Declaration

2 June 2009

Since 1 July 2007 superannuation law has required that each person becoming a trustee, or each director of a company which acts as trustee, of a self managed superannuation fund; sign an ATO approved form – the ATO Trustee Declaration.

Why require trustees/directors to sign ATO Trustee Declaration?

The purpose of the declaration is to press home that trustees/directors are responsible for the operation and management of their self managed superannuation fund.  The declaration contains an easy to read statement as the general duties of a super trustee, the investment restrictions and the sole purpose test under superannuation law and the record keeping requirements which apply to super funds.

The declaration must be signed within 21 days of being appointed as a trustee or as a director of the company acting as trustee.

Also, the declaration must be retained for as long as the person is a trustee or director of the company but in any event for at least 10 years.

Some important points which may be overlooked are:

  • the obligation to sign and retain the ATO declaration is an obligation on the particular individual who is appointed as the trustee or as a director of the company acting as trustee – the other trustees/directors have a slightly different obligation – this is discussed below;
  • the signing of the ATO declaration must be witnessed by a person over age 18 (this person could be a fellow trustee or director);
  • the signed declaration must be retained for as long as is relevant for the particular individual and for at least 10 years;
  • the signed declaration is only to be provided to the ATO – if and when requested; and
  • the auditor of the self managed superannuation fund will undoubtedly want to see the original signed declaration when completing the audit of the fund.

What are the penalties for breaching the ATO Trustee Declaration rules?

The importance that the ATO attaches to the declaration should not be underestimated.

There are significant penalties for failing to sign the declaration within the required 21 day period, failing to provide a signed declaration to the ATO when required and failure to retain the signed declaration.

The maximum penalties are:

  • a fine of $5,500 on the new trustee/director for failing to sign the declaration within the required period;
  • a fine of $5,500 on each other trustee/director for failing to ensure that the new trustee/director signs the ATO Trustee Declaration within the required 21 day period;
  • a fine of $5,500 on the new trustee/directors for failing to provide the signed declaration to the ATO as and when required
  • a fine of $2,200 on the new trustee/director for failing to retain the signed declaration for the required period.

Does this means that the other trustees/directors do not have to worry whether a new trustee/director has failed to sign the ATO declaration?

No, the other trustees/directors do have to worry.  An obligation is imposed on the other trustees/directors to ensure that the new trustee/director signs the ATO Trustee Declaration within the 21 day period. 

Further, the other trustees/directors must ensure that the signed declaration is retained for the required period and provided to the ATO as and when requested.

Simply hoping or expecting each trustee/director will sign, retain and disclose the declaration to the ATO falls short of ensuring – even if the relevant trustee/director does in fact sign, retain and disclose signed ATO Trustee Declaration to the ATO.

The trustees/directors should have a documented and disseminated process where on the appointment of a new trustee/director:

  • the new trustee/director signs the ATO Trustee Declaration within the required time of 21 days of their appointment;
  • the signed declaration is included as part of the formal records/documents of the superannuation fund; and
  • the signed declaration is provided if and when requested by the ATO or the fund’s auditor

Additionally, the trustees/directors should have a documented and disseminated process where authorised requests for the provision of the signed ATO Trustee Declaration are formally brought to the attention of the trustees/directors so that compliance with the request can be documented.

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