“When deciding whether to disqualify a trustee, we take into account how serious the contraventions are, how many contraventions have occurred and how likely it is they will continue to be non-compliant,” the ATO stated.

The ATO also reminded trustees it may apply through the courts for civil or criminal penalties to be imposed. These penalties apply where trustees have contravened provisions concerning, for example, the sole purpose test, the borrowing rules and the in-house asset rules.

The ATO may also give a trustee or investment manager a notice to freeze an SMSF’s assets where it appears that conduct by the trustees or investment manager is likely to adversely affect the interests of the beneficiaries to a significant extent.

“This is particularly important when the preservation of benefits is at risk,” the ATO stated.

From 1 July 2014, individual trustees and directors of corporate trustees are personally liable to pay an administrative penalty if they contravene certain provisions of the Superannuation Industry (Supervision) Act 1993, the ATO reiterated.

The value of each penalty unit is $170 and the penalty cannot be paid or reimbursed from the assets of the fund.