{"id":8996,"date":"2018-11-27T01:28:07","date_gmt":"2018-11-26T14:28:07","guid":{"rendered":"http:\/\/www.dbalawyers.com.au\/?p=8996"},"modified":"2022-10-27T20:22:30","modified_gmt":"2022-10-27T09:22:30","slug":"what-disqualifies-you-from-having-an-smsf","status":"publish","type":"post","link":"https:\/\/www.dbalawyers.com.au\/ato\/what-disqualifies-you-from-having-an-smsf\/","title":{"rendered":"What disqualifies you from having an SMSF?"},"content":{"rendered":"
Daniel Butler (dbutler@dbalawyers.com.au<\/a>), Director, DBA Lawyers<\/em><\/p>\n This article covers the main ways a person becomes a disqualified person, the consequences of disqualification and the options available to those who are disqualified. (We refer to a trustee in this article as covering both individual trustees of an SMSF and directors of SMSF corporate trustees.)<\/p>\n The ATO will use its powers to render an SMSF trustee a disqualified person where it sees the need, especially for illegal early access breaches. There are other ways a person may become disqualified and some people may not even realise they are disqualified. Acting as an SMSF trustee while disqualified has serious ramifications. It is therefore prudent to be aware of which trustees are or may be disqualified and how a trustee may become disqualified.<\/p>\n The first way a person can be a disqualified person is if they were ever convicted of an offence involving dishonest conduct. This is regardless of whether the conviction was in Australia or a foreign country.<\/p>\n Whether an offence is \u2018in respect of dishonest conduct\u2019 is not defined. However, explanatory material to the legislation includes an example of a person convicted of a minor shoplifting offence 20 years ago as an example of an offence involving dishonesty that would disqualify a person. On the other hand, arguably a person convicted of assault is not disqualified, since there is no dishonest intent.<\/p>\n Generally a person who is convicted of an offence involving dishonest conduct is a disqualified person for life. An exception to this rule exists that allows the ATO to waive a person\u2019s disqualified status. Such an application must be made within 14 days of the conviction. Accordingly, a person who anticipates a conviction must act very quickly.<\/p>\n An application outside of this 14 day period may be considered if the ATO is satisfied that there are \u2018exceptional circumstances\u2019 that prevented the application from being made within time. Also, a waiver can only apply if the offence did not involve serious dishonest conduct where the penalty is no more than two years\u2019 imprisonment or a fine no greater than a specified amount (eg, 120 penalty units).<\/p>\n The second way a person can become disqualified is if a civil penalty order was made against them. Civil penalties are broadly punitive sanctions imposed by the government as restitution for wrongdoing that are imposed through civil procedure rather than criminal process. Civil penalties are typically codified in legislation. Some of the specific civil penalty provisions relating to superannuation are outlined in s 193 of the Superannuation Industry (Supervision) Act 1993 (Cth) (\u2018SISA\u2019), which include:<\/p>\nHave you ever been convicted of an offence involving dishonest conduct?<\/h3>\n
Are you a person that is subject to a civil penalty order?<\/h3>\n