SMSF trustees are being reminded by the ATO of the pay-as-you-go (PAYG) obligations for members who receive a superannuation benefit payment and the requirement to report such arrangements to the regulator.
In a website update, the ATO stated trustees had PAYG obligations to withhold tax for members who receive a benefit payment and reminded trustees a summary statement was to be provided to the regulator by 14 August and a copy to the member by the 14 July.
“[Trustees] must provide a PAYG payment summary when you pay superannuation benefits to the trustee of a deceased estate, even though the amount of tax withheld is nil. This allows the trustee of the deceased estate to withhold the correct amount of tax from the payments they make,” it said.
“[Trustees] must provide this information even where you are paying an income stream and the rate of withholding is nil. This allows [the ATO] to ensure the individual pays the correct rate of tax once all their pension income from all their funds is taken into consideration.”
The ATO clarified that a PAYG requirement applied to members under the age of 60 where the benefit is an income stream or lump sum, or where the benefit is a pension that is a capped defined benefit income stream – including life expectancy, market-linked pensions and reversionary income streams – for those 60 years or older.
In addition, trustees are reminded to take a member’s capped defined benefit income stream into consideration when planning a member’s withholding and their PAYG obligation from super benefits paid to a non-dependent in the event of another person’s death.
In a separate update, the ATO announced it has delayed the shutdown of the electronic superannuation audit tool (eSAT) while it improves the online services for business model.
It has warned auditors that eSAT is incompatible with new operating systems, but will remain open to auditors after the online services for business facility received feedback in regards to some of its functions.
The ATO has recommended auditors continue using the online services for business facility to lodge audit complete advices and auditor contravention reports.
