It is a legal requirement for Self-Managed Superannuation Fund (SMSF) Trustees to ensure SMSF Financial Statements are Audited and Tax Returns lodged with the Australian Taxation Office by the respective due date every year. To encourage on-time lodgement and ultimately to protect retirement savings ATO has recently announced a crackdown on returns that become overdue.
The ATO has advised that any Self Managed Superannuation Funds (SMSF) with income tax returns outstanding for more than 14 days will have their compliance status removed from Super Fund Lookup.
Once a fund’s compliance status is removed, superannuation guarantee contributions (SGC) and rollovers from another super fund will not meet SGC rules nor will they be deemed a valid rollover nor will the employer be eligible for income tax deduction of contributions made.
How your SMSF and its members will be impacted
If your SMSF tax return for the year ended 30 June 2019 and/or prior year lodgements have been overdue for more than two weeks, it will not be able to receive:
- any super guarantee contributions from employers; or
- any rollover benefits from other superannuation funds.
The lodgement due date of the 2019 return for a SMSF with a good lodgement history is 15 May 2020. For newly registered SMSF’s, the due date is 28 February following the end of the financial year.
What to do if you are impacted
If the SMSF cannot meet the due date for lodgement of an annual return, you may be able to apply for a lodgement date deferral prior to the due date in order to seek an extension to lodge.
However, if the annual return still remains outstanding after the deferred lodgement date or there is already an overdue return from a prior year as at 1 October 2019, the following action will need to be taken:
Employer super guarantee contributions
Employers will direct your super guarantee contributions to the employers default super fund or another complying super fund and you will then have to roll the balance over to your SMSF once its complying status has been restored.
Rollover of member balances
No rollover from another super fund will be accepted by your SMSF until it has lodged the overdue annual return whether the rollover is already in progress or yet to be initiated.
Additional information for employers making contributions to an SMSF
If you are unable to make super guarantee contributions to an employee’s SMSF, you can check the status of their Super Fund Lookup (http://superfundlookup.gov.au) to confirm that it is due to the SMSF not being listed as a complying fund.
If the status is listed as “regulation details removed” rather than “complying” you need to notify your employee that you are unable to make super contributions to their SMSF.
In the interim you will need to direct their super guarantee contributions to the business’ default super fund or another complying super fund nominated by that employee until their SMSF is complying.
Please contact us on 03 9820 6400 to discuss further.