Self-managed superannuation fund (SMSF) trustee insurance specialist Self Super Insurance has improved its offering to now include actions against excess contributions liabilities.
In situations where members of an SMSF have breached the contributions caps and received an excess contributions tax liability assessment, the trustees of the fund have four choices as to how they respond. They can either pay the liability, provide additional information, apply to the commissioner of taxation for consideration of special circumstances, or challenge the assessment on the grounds the Australia Taxation Office (ATO) applied the law incorrectly.
"We considered the options available to a member and realised we could assist members of SMSFs in situations where the ATO has applied the law incorrectly," Self Super Insurance managing director John Kelly said.
Before now, standard cover through Self Super Insurance included protection from liabilities such as losses arising from claims made against the trustees or the SMSF, civil penalties incurred by the trustees, defence costs arising from official investigations of the fund, and certain legal costs in pursuit of a compensation claim against a third party.
The enhancement means cover now also includes a contribution of $25,000 towards the legal costs incurred in making a challenge on the grounds of incorrect application of the law by the ATO.
"There will be occasions that someone will wish to legitimately challenge the ATO regarding an excess contribution tax assessment notice, but won't because the costs of doing this potentially outweigh the benefit. Our solution gives these people an option," Kelly said.
The Self Super Insurance trustee liability cover was launched earlier this year.
