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Trustee obligations of a disqualified person

Posted on March 28, 2014 by admin


There are ramifications when a trustee in a self managed super fund (SMSF) becomes a disqualified person. An individual can become a disqualified person if any of the following conditions apply. If they: -have been convicted of an offence involving dishonesty -have been subject to a civil penalty order under the super laws -are insolvent under administration -have been disqualified by a court or regulator A company is a disqualified person if any of the following conditions apply: -a responsible officer of the company (such as a director, secretary, or executive officer) is a disqualified person -a receiver, official manager, or provisional liquidator has been appointed to the company -action has been taken to wind up the company Under superannuation laws, if an individual becomes a disqualified person they must notify the ATO immediately of their disqualification- unless they were disqualified by the ATO- and cease being, or acting as, a trustee. It is an offence for a disqualified person, who is aware of their status of being disqualified, to continue to be, and act, as a trustee of the SMSF.  Penalties for this can include fines and in some cases, imprisonment. To determine whether a disqualified person can again […]


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Reduced super concessions under Division 293 tax

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A tax may apply to individuals with high incomes to reduce the amount of concession paid on their super contributions. This tax is known as Division 293 tax. Division 293 tax was introduced to reduce the concession on superannuation contributions for individuals with income greater than $300,000 per annum. Under Division 293 of the Income Tax Assessment Act 1997 tax will be payable on certain contributions made from 1 July 2012. If an individual’s income for surcharge purposes, plus their low-tax contributions are greater than $300,000, they may be liable to pay an extra 15 per cent tax on their taxable contributions. For individuals who are members of a defined benefit fund Division 293 tax may be calculated on notional contributions, which are not capped. There are also modifications to the contribution calculation for constitutionally protected state higher level office holders or Commonwealth justice. To calculate whether an individual has income and low-tax contributions greater than $300,000 the ATO will be looking at: income reported on the individual’s income tax return, including: -taxable income -total reportable fringe benefit amounts -net financial investment loss -net rental property loss -amounts on which family trust distribution tax has been paid -super lump sum […]


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How does the super guarantee charge work?

September 20, 2017

Employers who do not pay the minimum amount of super guarantee for their employee(s) by the due date may have to pay the super guarantee charge (SGC).

The charge is made up of super guarantee shortfall amounts including any choice liability calculated on your employee’s salary or wages, interest on those amounts (currently 10 per cent) and an administration fee ($20 per employee, per quarter).

Employers must report and rectify the missing payment by lodging an SGC statement by the due date and paying the SGC to the ATO. Employers may be able to use a late payment to reduce the amount of SGC, however, they must still lodge an SGC statement and pay the balance of the SGC to the ATO.

The ATO prioritises the collection of unpaid SGC debts. If an employee reports an employer for unpaid super, the ATO will investigate on their behalf.

Employers must lodge their SGC statement and pay the charge by the due date.

Quarter Period Due date
1 1 July – 30 September 28 November
2 1 October – 31 December 28 February
3 1 January – 31 March 28 May
4 1 April – 30 June 28 August

If a due date falls on a weekend or public holiday, the payment can be made the next working day.

Once the statement has been lodged and the SGC is paid, the ATO will transfer the super guarantee shortfall amount and any interest to the employee’s chosen super fund.