Why has the Speeding Ticket legislation been introduced?

Currently the ATO has only four responses to an SMSF breaching a prescribed standard:

• making the SMSF non-complying;
• applying to the court for the imposition of civil penalties on the trustees;
• accepting an enforceable undertaking from the trustees; or
• disqualifying the trustees.  

These powers are very significant but in most situations are disproportionate and inflexible for administrative transgressions.  Also, as the current penalties are “all or nothing”, there is no incentive on the part of the SMSF to notify the ATO of the existence of a breach and to actively remedy the breach.  

The Government reasons that SMSF trustees will be more likely to be co-operative in remedying a contravention if the trustee’s behaviour may favourably influence the ATO in determining the magnitude of the penalty which is to be imposed.