The ATO has amended its procedures regarding the status of newly established SMSFs on its Super Fund Lookup service.
To this end, SMSFs that have recently been set up and have elected to be regulated will be examined by the regulator before being listed on the Super Fund Lookup website.
This scrutiny will allow the ATO to determine whether the fund has been established to gain illegal early access to superannuation benefits and if the SMSF trustees are considered to be “tax persons of interest”. An individual can be regarded as a tax person of interest if, for example, they have outstanding prior-year income tax returns.
It is expected this process will only take a few days to complete, but trust deed provider SuperCentral warns the ATO can take up to 56 days to perform the necessary checks.
“During this period, any related employers can make contributions to the fund, but the fund cannot receive rollovers or transfers and it is highly unlikely that any non-related employer would consider making contributions at this point,” SuperCentral said.
As part of the fine-tuned process, the ATO has created the new status on Super Fund Lookup of “registered” and this will be assigned to SMSFs once the regulator has completed its investigation of the fund and its trustees.
When this happens, the SMSF will be able to accept rollovers and transfers from other funds in addition to all member contributions.
“Within one or two weeks after first being listed on the website, the ATO will issue a notice of compliance and the status of the SMSF will be ‘complying’,” SuperCentral noted.
Previously, a newly established fund would appear on Super Fund Lookup immediately, but would reflect a “status to be determined” standing and would not be granted “complying” status until it lodged its first annual return.
According to SuperCentral, this change should eliminate any confusion that had existed with the “status to be determined” classification. These issues included whether the SMSF could accept rollovers or if employers could make contributions to the newly established fund and claim a tax deduction for them.
The ATO recently experienced a glitch with the status of some SMSFs on the Super Fund Lookup facility.