SMSFs with overdue returns risk losing contributions and rollovers

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SMSFs with overdue annual returns risk the ATO preventing them from receiving employer contributions and rollovers.

The ATO has announced that, from 1 October 2019, if an SMSF is over two weeks overdue in lodging any of its annual returns, and hasn’t requested a lodgement deferral, then the ATO will change the status of the fund on Super Fund Lookup to ‘Regulation details removed’.

Super Fund Lookup is the ATO’s public register of the compliance status of SMSFs.

This is a significant shortening of how long SMSFs have to have overdue returns before their status is changed – down from several years.

“Having a status of ‘Regulation details removed’ means APRA funds won’t roll over any member benefits to the SMSF and employers won’t make any super guarantee (SG) contribution payments for members of the SMSF,” says the ATO.

“We’re taking this approach because non-lodgment combined with disengagement indicates that retirement savings may be at risk. This status will remain until any overdue lodgments have been brought up to date.”

The ATO will have a two-step process for updating Super Fund Lookup. On the first business day of each month the ATO will change the status of SMSFs that are more than two weeks overdue, and reinstate the ‘complying’ status for SMSFs that have lodged their overdue annual returns.

The ATO says that lodging the SMSF Annual Return on time is a “fundamental part of your obligations as an SMSF trustee”.

“If SMSF trustees don’t think they can meet the due date, they should call, before the due date, to seek a deferral to lodge.”

“While the fund’s status is ‘Regulation details removed’, members should alert their employer to make any SG payments into the employer’s default super fund or a fund of the member’s choice.”

“Once the SFLU [Super Fund Lookup] status of the SMSF has been updated to ‘complying’, members can request a rollover to their SMSF of any member benefits that may be held outside their SMSF.”

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