The Australian Taxation Office has sent out of reminder to SMSF trustees that new rules apply to late lodgment of annual returns next month.
From October 1, if an SMSF is more than two weeks overdue on any annual return lodgment date and hasn’t requested a deferral, the ATO will change the fund’s status on Super Fund Lookup to “regulation details removed”.
What this means is that the fund no longer has complying status. This status will remain in place until lodgments are brought up to date.
The ATO says that if trustees don’t think they can meet a lodgment deadline, they should contact it before the due date to seek a deferral.
If a fund’s status is “regulation details removed” it is unable to receive payments or rollovers. Super guarantee payments must be made into another fund. Members can request a rollover when the SMSF is complying again.
Earlier this year the ATO reported that about 14 per cent of SMSFs lodge their annual returns late. The tax office’s view is that non-lodgment is an indicator that savings may be at risk.
SMSFs that have trouble with their first lodgment often continue to struggle to meet their compliance obligations.
In March, ATO assistant commissioner superannuation, Dana Fleming, said the tax office would increase its auditing of late lodgers and non-lodgers.
Outcomes from an audit may include penalties, default assessments with penalties, disqualification of trustees and notice of non-compliance.
In June, the tax office has alerted SMSF trustees to a number of changes to annual return reporting requirements.
LRBAs. Trustees must report any outstanding loan balances for all limited recourse borrowing arrangement for each member of the fund. The ATO has a preferred methodology for calculating the amount that must be reported.
Cryptocurrency. Cryptocurrencies must now be reported under a dedicated label. Previously they were reported under “other overseas assets”. The ATO defines cryptocurrency as a digital asset in which encryption techniques are used to regulate the generation of additional units and verify transactions on a blockchain.
Downsizer contributions. Downsizer contributions must be reported in the member section of returns. The total value of all downsizer contributions made by members in 2018/19 must be reported as “proceeds from primary residence disposal”, along with the date the fund received the contribution.