With 30 June approaching, SMSF trustees will need to have their affairs in order and ensure their fund is compliant before the end of the financial year, HLB Mann Judd has said.
At the outset, trustees needed to make sure the fund’s auditor was ASIC-approved and licensed, HLB Mann Judd Sydney director of wealth management Andrew Yee said.
“Since 1 July 2013, an auditor of an SMSF must be specifically registered and approved as a specialist SMSF auditor by ASIC,” Yee said.
“As this requirement did not exist prior to 30 June 2013, it was easier to qualify as an approved SMSF auditor.
“Trustees of SMSFs cannot automatically assume that the previous year’s auditor will be ASIC-approved and licensed, as any existing auditors did not apply or are still applying for registration.”
SMSF trustees also needed to be aware of the new penalties that would come into force in the new financial year, he said.
“New penalties will apply for breaches from 1 July 2014,” he said.
“Previously, if trustees breached the rules, the Australian Taxation Office (ATO) could declare the fund non-complying and subject it to a 45 per cent tax on the value of assets.
“From 1 July, the ATO will have the power to penalise the fund without declaring it non-compliant, depending on the type of breach that is involved.”
In addition to the penalties, the ATO can still declare the fund non-compliant, however, the changes provide the ATO with a variety of enforcement options.
The penalty that would apply would ultimately depend on the nature and severity of the fund breach, Yee said, adding that one of the new penalties for breaching the rules was that the ATO would be able to force trustees to undertake trustee education.
Another change that applies from 1 July concerns the way SMSFs will be required to receive member contributions from employers as part of the SuperStream legislation.
“This affects all superannuation funds, but trustees of SMSFs are more likely to be caught out if they are not aware of the change,” Yee said.
“Essentially, SMSFs will need to be able to accept superannuation contributions electronically to comply with the SuperStream data and payment standard, so contributions made by non-electronic means, such as cash or cheque payments, will not be acceptable.
“SMSF trustees will need an electronic services address (ESA) for the delivery of contribution messages and must provide the ESA, along with the SMSF’s Australian business number and bank account details, to employers before 31 May 2014.”
He said that would ensure the employer was able to comply with the new payment rules in time for the new financial year.
Without that information, an employer would be unable to comply with the SuperStream requirements and the ATO could penalise SMSFs and employers should they fail to provide that information, he said.
