News

ATO, Documentation

ATO offers new commutation assistance service

commutation authority assistance

A new ATO service will allow trustees issued with a commutation authority to make direct contact and recieve assistance to resolve any problems.

The ATO has created a dedicated email service for SMSF trustees and their advisers to provide assistance to funds that have been issued with a commutation authority.

The temporary email service, developed as part of the regulator’s COVID-19-related support, can be used to find out why the ATO has sent a commutation authority to an SMSF and what it needs to do in response.

The service will also allow funds to identify and rectify any reporting issues that may have led to the regulator issuing the commutation authority.

Additionally, SMSFs can also ascertain why a member has been approached by their Australian Prudential Regulation Authority fund after the latter receives a commutation authority from the ATO to resolve any issues associated with the SMSF’s transfer balance account report.

In an update to its website, the ATO stated the service was available until 31 August 2020 and was only being made available to provide information to trustees to assist them in meeting their obligations.

“This service does not replace your obligation to comply with, and report your response to, a commutation authority within 60 days and is only to provide information to assist you in meeting your obligations,” it said.

“This service is not available to assist individuals who have exceeded their transfer balance cap and have been sent an excess transfer balance determination.”

For those using the service, the ATO stated they should provide as much information as possible when making contact, including the name and Australian business number of the fund that received the commutation authority, when the authority was due, the member it relates to and any questions trustees may have.

In a further update, the ATO also stated the intermediary limited recourse borrowing arrangement (LRBA) legislative instrument had been registered after a period of public consultation on the draft instrument closed in mid-March.

The finalised instrument, and its explanatory statement, were registered on 19 May under the title Superannuation Industry (Supervision) In-house Asset Determination – Intermediary Limited Recourse Borrowing Arrangement Determination 2020.

The ATO noted the legislative instrument would be relevant to SMSF trustees who entered into an intermediary LRBA, which involves an SMSF and a lender, as well as a holding trust.

“Under this arrangement, the trustee of the holding trust borrows money as principal from a lender to acquire a single acquirable asset, but the SMSF maintains the holding trustee’s borrowing. This means the SMSF borrows indirectly through the holding trustee,” it stated.

“The purpose of the legislative instrument is to exclude a SMSF’s investment in the holding trust from being an in-house asset, but only if the intermediary LRBA meets certain requirements described within the instrument,” it added, noting the instrument applies to intermediary LRBAs established any time after 24 September 2007.

Copyright © SMS Magazine 2020

ABN 43 564 725 109

Benchmark Media

Site design Red Cloud Digital