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'. 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 you become a disqualified person you need to:

• remove yourself as trustee and inform us immediately; and
• transfer your 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 refer to the ATO website.