While on paper they may have a family member, an accountant or adviser as a power of attorney, they continue to try and control their SMSF from afar, he said.

“Often people will say that their accountant has got a power of attorney or that their financial adviser is doing all the investments for them, but that’s still not enough control. It has to be overarching control of the account,” he explained.

“We saw a case where the sister, who was appointed as a director of a corporate trustee and held a power of attorney on behalf of her brother, had no idea about super, investing and everything else that goes along with it. If the ATO had done a spot audit and questioned her about her ability to manage the fund she would have failed in a heartbeat.”

Mr Evans said a lot of expats with SMSFs are also under the assumption that it will be very difficult for the regulator to catch them out.

“The most commonly used phrase is “how is the ATO going to know?”, but the regulator now has plenty of tools at its disposal including data-matching technology [to monitor this].

“If the ATO suspects something and they can see that its pretty easy money for them to get in terms of fines and tax compliance and that sort of thing, it’s amazing how much effort the regulator will go to in order to chase that money.”

If the client doesn’t have any physical assets such as property, collectibles or gold, then Mr Evans said in some cases it may be best to move the client to a retail super fund with flexible investment options.

“If the client just has direct equities and managed funds and still wants to have some sort of control over the investment making decisions, then it’s a pretty simple exercise just to wind up the SMSF and roll back to a retail super fund and build direct equity and managed fund portfolio inside the retail super fund,” he said.

“They can still have control over it but we don’t have the issues of active members and central management and control.”