The extension of SuperStream to SMSFs will be a positive development for rollovers, however, the inclusion of contributions will be problematic, a technical expert has warned.
At the recent Chartered Accountants Australia and New Zealand 2018 National SMSF Conference, SuperConcepts technical services and education general manager Peter Burgess said the draft regulations seek to remove the carveouts for SMSFs in order to extend SuperStream to SMSF rollovers.
“Rollovers to and from an SMSF will be subject to the SuperStream standards. This is a good thing for the SMSF industry and will certainly speed up rollovers, typically within three business days,” Burgess told the conference in Melbourne this week.
“In order for that to happen, at least 10 business days before the fund first receives a contribution or a rollover, the fund must provide the ATO with the fund’s Australian business number, bank account details and electronic service address (ESA).
“I can see some challenges in trying to convince an SMSF trustee that before they can make a non-concessional contribution they’ve got to get themselves an ESA, which they might not have.”
However, the issue he underscored is that SuperStream will not only apply to rollover requests made on or after 30 November 2019, but also contributions.
“The problem I can see with this proposal is that they are removing the carveouts for SMSFs in their entirety, which means this is not only going to apply to rollovers but to contributions as well, and any type of contribution will [be captured],” he noted.
“But also, not all contributions are cash transactions. There are many in-specie contributions in the SMSFs sector and there are many types of transactions that are classified as contributions, such as an improvement to a property, which doesn’t involve any transfer of cash but it’s still technically a contribution.
“All of these things have been caught by the new regulations.”
He said it would make more sense for the regulations to be restricted to cash contributions, however, he does not believe the government will make any changes.
“I think the intent here is to get as many SMSFs in the SuperStream regime as they can,” he said.
“So again, SuperStream will be great for rollovers, but there will be difficulties associated on the contributions side of things.”
