It's important that you understand the things you can’t do with an SMSF.
Although as the fund trustee, you have the ability to invest the SMSFs assets and funds on behalf of fund members – you can’t use them for emergencies or to supplement cash flow. This applies even if you pay the fund back later. This activity will be picked up in the fund’s yearly audit.
It can be illegal to:
- access retirement savings early
- invest in a related business
- use the fund’s assets – for example, by holidaying rent free in your SMSF’s investment property, or
- be paid for your duties or services as a trustee.
If you or a member access super before you’re legally entitled, significant penalties can apply. You will also need to pay income tax on super you access before you’re entitled to it.
Beware of people promoting early release of super schemes. They might offer to help you withdraw your super before retirement to buy a house or go on a holiday. These schemes are illegal.
If it sounds too good to be true, it probably is. Get a second opinion – phone the ATO on 13 10 20 for help.
When SMSF trustees do not comply with super and tax laws, there are a range of actions that the ATO may take. These include disqualification, penalties, and tax consequences.
