False or misleading statements which do not result in a shortfall amount

The ATO has published Practice Statement PS LA 2012/4, which details how they intend to administer the false or misleading no-shortfall penalty.

They advised Trustees who make a false or misleading statement after 4 June 2010 may be liable for penalties, even where the statement does not result in a shortfall amount. The penalty will not be applied if the trustees took reasonable care at the time they made the statement.

The statement must also be false or misleading in a ‘material particular’ for this penalty to apply. For example, a rollover benefits statement and a notice to claim a tax deduction form both contain material particulars.

SMSF trustees are ultimately responsibly for their fund; even if they use professional services such as administration providers, tax agents or other financial advisers.

The ATO has provided an example in the practice statement about a SMSF loan to members and where the new penalty may apply in relation to SMSFs.

The statement:

  • can be written or verbal
  • must be material to tax or super law
  • can be for any taxes, including reporting, lodgment, debt and registration statements made by an entity.

For more information refer to:

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