• Kieran Powell

ATO to change fund status for late SMSF Annual Returns

The ATO has advised that from 1 October 2019, if an SMSF is more than two weeks overdue on any annual return lodgment due date and hasn’t requested a lodgment deferral, they will change their status on Super Fund Lookup (SFLU) to ‘Regulation details removed’.   The Regulator is 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’s new process

On the first business day of each month, there is now a two-step process for updating SFLU.

Where an SMSF trustee hasn’t lodged their SMSF annual return on time and they’re more than two weeks overdue, the ATO will change their SMSF regulation status to ‘Regulation details removed’ on SFLU.

Where all overdue lodgments are received for an SMSF during the previous month, the ATO will update SFLU to reinstate the SMSF’s ‘complying’ status.

How the change will affect SMSFs

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.  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 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.

Key takeaway

So what’s the lesson here?  Simply, if you don’t think that the SMSF can meet the due date, ensure that you contact the ATO before the due date to seek a deferral to lodge.  Failure to do so, could otherwise be an inconvenience and problematic.

For further information about this, you can visit the ATO website.

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