SMSF trustee who becomes a disqualified person
29 October 2013
What you should do if you are an SMSF trustee who becomes a disqualified person
There are consequences when a trustee of a self-managed super fund (SMSF) becomes a 'disqualified person'. Trustees include directors of a corporate trustee of an SMSF. If you are a trustee and become a disqualified person, you are not allowed to remain a trustee.
A person can become a disqualified person for a number of reasons, most commonly when they are considered to be insolvent, under administration or an undischarged bankrupt.
A disqualified person commits an offence if they know they are disqualified and continue to be, or act as, a trustee of an SMSF. Penalties, including fines and imprisonment, can apply. There is also a risk the SMSF can be made non-complying if you do not take appropriate action.
If a person becomes a disqualified person they need to:
¦ remove themselves as a trustee and inform the ATO immediately
¦ transfer their superannuation interest out of the SMSF
If by doing so the fund no longer meets the definition of an SMSF, it may need to be restructured to meet the requirements of a regulated super fund or be wound up.
For more information visit the ATO website or refer to
Disqualified persons and self-managed superannuation funds.