A recent case reported in The Australian of 7 February 2012 highlights the need for trustees of Self Managed Superannuation Funds to remain actively involved in overseeing their fund to avoid possible penalties for breaches of the Superannuation Industry (Supervision) Act.
While much of the administration of the fund can be left in the hands of professional advisers and accountants, the trustees are still legally responsible for the fund.
In the case reported, a couple were trustees in a SMSF and the husband left the country taking $3.46m out of the fund with him.
Apparently neither party was of preservation age nor had they triggered a release from the fund, the result being that the SMSF was found to be non-compliant and the ATO came after the wife to recover $2.9m in tax and penalties.
According to the report while the wife argued that she had no knowledge of her husband's intentions, she lost the action because she was a trustee of the fund and consequently held to be legally responsible.
It is clearly not wise for a trustee to leave the fund in the hands of co-trustees.
In the case in point, the disastrous result could have been avoided if each trustee of the fund was a joint signatory to all investments and monies in the fund.
Mike Emerson
Co-Principal Brisbane Mediations
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