“Auditors of SMSFs need to determine if that figure is correct or not and if it is within the law. It is up to the trustee to check those earnings, but the auditor needs to check that figure,” he said.

“Unless there is a certain formula it is going to be quite arbitrary [and] unless there are some sort of guidelines on this calculation and some rules on this new law, then it will be difficult for the auditor… and could cause problems down the track,” he said.

“If trustees deliberately put in excess contributions knowing that they just have to take out their capital later on, the earnings is a figure that can maybe be manipulated or mistakenly gotten wrong, and that is an issue,” he added.

Mr Yee said that if money goes into an SMSF which is deemed excess, from the time that money entered the fund it has earned income from interest, dividends or rent.

“That income has to be now taken out and included as personal taxable income, subject to marginal tax rate, and then the issue is how do we calculate that magical number of income?” he said.