SMSFs with late annual returns face restrictions under new ATO rules
February 10, 2020
Self-managed superannuation funds (SMSFs) with late annual returns, or late income tax returns, may face restrictions under new rules from the Australian Taxation Office (ATO).
From October 1, 2019, the status of an SMSF with a late annual return will be changed from ‘complying’ to ‘regulation details removed’ on the Super Fund Lookup (SFLU) register.
On the first day of each month, the ATO will now:
- Update the status of an SMSF with an annual return that is more than two weeks overdue from ‘complying’ to ‘regulation details removed’ on SFLU
- Update the status of an SMSF that has lodged all its outstanding annual returns from ‘regulation details removed’ to ‘complying’ on SFLU.
What is the impact of ‘regulation details removed’?
If your fund has had its regulation details removed, it means:
- APRA funds will no longer allow rollovers to be made to the fund
- Employers will stop making superannuation guarantee (SG) contributions to the fund.
It may also mean that some financial institutions may place restrictions on your SMSF. For example, we know banks are now checking SFLU and are not allowing new accounts, such as a new term deposit, to be established until the fund is ‘complying’ again.
What should SMSF trustees do?
SMSF trustees should make sure their annual returns are lodged by the due date on a yearly basis.
If your fund’s annual return is being lodged through a tax agent, the annual return is normally due on May 15 following the June 30 year-end.
If it is a first-year annual return, then it would be due on February 28 following the June 30 year-end.
If a trustee knows it is going to be late in lodging an annual return, then they should request that the ATO grants a deferral to lodge an annual return prior to the date that it is due.
If a trustee knows that their fund has had ‘regulation details removed’, they should contact any employer making SG contributions and request that these now be paid to an APRA fund rather than the SMSF.
Trustees can check the status of their fund at the SFLU register: https://superfundlookup.gov.au/
Talk to the superannuation experts
If trustees need help reinstating their ‘complying’ status for their SMSF, LDB’s team of superannuation experts can help.
With years of experience, our team of trusted specialists will ensure you are getting the most value out of your SMSF strategy.
To find out how LDB’s team of superannuation experts can help, give us a call on (03) 9875 2900 or fill in the contact form below.