ATO sending ‘your SMSF’s registration may be cancelled’ letters

“Your SMSF's registration may be cancelled" ATO letters, SMSF trusteesThe ATO appears to be sending letters directly to some SMSF trustees, saying their fund will be de-registered if they can’t show the ATO that it holds assets.

SMSF administrator Superfund Wholesale have published a de-identified copy of a letter received by an SMSF client from the ATO.

Superfund Wholesale said “we’ve even seen example of this letter being sent to SMSF trustees where their fund has already lodged an annual SMSF return – meaning the fund not only has assets, but an independent audit has been conducted!”

Apparently the letters are being sent directly to the SMSF trustees and not via their Tax Agent.

The letters are titled “Your SMSF’s registration may be cancelled.”

“Our records indicate that [the trustee for SMSF] doesn’t hold any assets and may no longer be entitled to be registered as an SMSF.”

It goes on to say “your self-managed super fund (SMSF) may no longer be entitled to be registered” and “your SMSF’s registration may be cancelled.”

If the SMSF does hold assets the trustees are asked to complete a confirmation of SMSF establishment form and return it to the ATO, along with “documentary evidence of assets held by this fund, such as the fund’s financial institution income statements.”

In the letter received by Superfund Wholesale the trustees are given around three weeks from the date of issue of the letter to respond, or the ATO will “cancel the fund’s Australian Business Number and tax file number.”

“We will treat the fund as never having operated; any future SMSF must be registered as a new fund,” says the letter.

This action appears to be at odds with the reported moves by the ATO to clarify the steps required to properly set up an SMSF, particularly regarding application for registration and the establishment of a bank account.

The ATO also appears to be preparing to contact some SMSF trustees in regards to under-reporting of Non-Arm’s Length Income.

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