Bob Budrieka has again been quoted as a subject matter expert in a recent Daily Telegraph article highlighting how improper use of your super fund can result in a big fine or even a prison sentence.
Large penalties for misuse of SMSF
Anthony Kean reports that “SELF-managed super funds are being illegally used to pay household bills, lend money to family members and even buy groceries.” Those who break strict super rules are risking hefty tax penalties: $10,000-plus fines and potentially jail.
Planning for Prosperity senior adviser Bob Budreika said it was common for people with several online banking accounts to accidentally use their SMSF account for personal spending, or deliberately withdraw money without realising the potential penalties.
“They see it like a business and think ‘I will pull the money out and just pay it back later’,” he said.
“Many people treat the legislation with disrespect.”
WHAT YOU CAN’T DO WITH A SMSF
- Pay personal expenses
- Lend money to yourself or a relative
- Buy a holiday home
- Use an SMSF as bank account for business or household transactions
- Buy real estate from yourself or a relative
- Rent a property to a relative
- Buy art or other collectibles to display in your home
- Withdraw money before retirement
The ATO and SMSF
The ATO are very clear on your responsibilities as an SMSF operator. Read more here
Here is an informational video from the Australian Tax Office on this subject: