If an SMSF fails to qualify as a complying superannuation fund, it may result in the ATO issuing a Notice of Non-Compliance. Tax consequences of receiving such a notice are:
- In the year it becomes non-complying, the assessable income is taxed at the highest marginal tax rate of 45%, plus 2% Medicare Levy. The assessable income includes an amount equal to the market value of the fund’s total assets less any contributions the Fund has received that are not part of the taxable income of the fund.
- For every year the Fund remains non-complying, its assessable income is taxed at the highest marginal tax rate.
To determine whether an SMSF is complying, Trustees can perform a search on the Super Fund Lookup website.
