Non-lodgement is a key area of focus for the Australian Taxation Office (ATO) in uncovering non-compliant funds and illegal early super release schemes.
The ATO has announced that from 1 October 2019, self-managed super funds (SMSFs) with an annual return more than two weeks overdue will be suspended from receiving contributions and rollovers.
“Lodging your SMSF annual return on time is a fundamental part of your obligations as an SMSF trustee,” the ATO said.
“We’re taking this approach because non-lodgement combined with disengagement indicates that retirement savings may be at risk.”
How will this affect SMSFs?
On the first business day of each month, the Super Fund Lookup (SFLU) system will be updated to reflect the current status of a superannuation fund.
Where all overdue lodgements are received for an SMSF during the previous month, the SFLU will show the SMSFs status as ‘complying’.
Where an SMSF trustee hasn’t lodged their SMSF annual return on time and they’re more than two weeks overdue, the ATO will change their SMSF regulation status to ‘Regulation details removed’.
Having a status of ‘Regulation details removed’ means non-SMSF funds won’t roll over any member benefits to the SMSF and employers won’t be able to make any super guarantee (SG) contribution payments to members of the SMSF.
Once all overdue lodgements are brought up to date the SMSF will have their ‘complying’ status reinstated.
How will this affect SMSF members?
During the time when the SMSF has their SFLU status suspended, members will need to inform their employer to make SG contributions into an alternative fund as the SMSF will not be able to accept employer contributions until its status is reinstated.
Once reinstated, the member will then need to request a rollover to their SMSF of any interim benefits received in another fund.
What if you can’t meet the due date for lodgement?
Exceptional or unforeseen circumstances may affect your ability to lodge by a due date.
If SMSF trustees don’t think they can meet the due date, they should seek a deferral to lodge. Your tax agent is able to complete this request for you.
If you have outstanding lodgements or are struggling with the regulatory demands of running an SMSF, Marsh & Partners are able to assist. You can contact our SMSF advisors on 07 3023 4800 or at firstname.lastname@example.org
GENERAL ADVICE WARNING: This information has been prepared without taking into account your objectives, financial situation or needs. Because of this, you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation or needs. We suggest you obtain specific financial advice from a licensed financial advisor.