SMSF Status on SuperFund Lookup - the new rules
The Australian Taxation Office (ATO) maintains a publicly accessible website of Self Managed Superannuation Funds (SMSFs) – called SuperFund Lookup. This data base contains basic information about an SMSF such as its name, its ABN, contact details and, most importantly, its “status”. Neither the name of the trustee nor the names of the members of the SMSF are disclosed on the website.
Recently the ATO has changed its approach to the “status” of SMSFs as listed on the website. Before the recent changes, an SMSF could have the straightforward status of either “complying” or “non-complying” but the third, confusingly but correctly, “status to be determined” presented a problem.
Before the recent changes when an SMSF was established, it could only be a complying superannuation fund, once the first annual return for the SMSF had been lodged and processed by the ATO and a notice of compliance issued. The SMSF would then have the status of “complying” on the SuperFund Lookup and would be treated as being a complying superannuation fund from the time of its establishment. In the period between the establishment of the fund and the issue of the notice of compliance the status of the fund was technically “yet to be determined”. Unfortunately, this “status to be determined” tag led to confusion: could the fund accept rollovers and transfers? Could an employer make a contribution to the fund and claim a tax deduction for the contribution?
When an SMSF is established and an election to be regulated has been made:
The ATO will undertake various checks on the SMSF before the SMSF is listed on the website which can take a few days but could be as long as 56 days.
These checks are undertaken primarily to determine whether the SMSF is being used as a means to gain illegal early access to super benefits and whether the individuals associated with the SMSF (such as the members, the trustees or the directors of the corporate trustee) have been identified as “tax persons of interest” - for example, individuals who are yet to lodge prior year tax returns. During this period, any related employers can make contributions to the fund, but the fund cannot receive rollovers or transfers and, it is highly unlikely that any non-related employer would consider making contributions at this point.
When the ATO has completed the various checks and no reason has been found to prevent inclusion on the website:
The details of the SMSF will be included on the website and its status will be “Registered” at which time the SMSF becomes eligible to receive rollovers and transfers as well as contributions from members and employers (whether related or non-related).
Within one or two weeks after first being listed on the website, the ATO will issue a notice of compliance and the status of the SMSF will be “complying”.
The SMSF is eligible to receive contributions, rollovers and transfers, and most importantly, employers and other super trustees can deal with the SMSF without concern as to the compliance status of the SMSF.
The ATO will not wait until the SMSF has lodged its first annual return before issuing the notice of compliance.
This does not mean that the ATO is prevented from either revoking the issue of the notice of compliance or from issuing a notice of non-compliance if the circumstances of the SMSF warrant such action.
For any further information regarding this article please call SUPERCentral on 02 8296 6266 or email firstname.lastname@example.org.