A sector specialist has reminded advisers and their clients as to the inflexibility of the director identification (ID) number requirements and how the winding up of an SMSF with a corporate trustee structure will not excuse individuals from having to comply.
Accurium head of education Mark Ellem addressed the issue during a technical webinar he hosted today in response to a delegate inquiry asking whether directors of an SMSF corporate trustee needed to apply for a director ID number before 30 November 2022 if the fund was wound up before that date but after 1 July 2022.
“The answer is yes. [The requirement] is not to do with the wind up of the fund, it is [to do with] were you a director on or before 31 October 2021 and you’re still alive,” Ellem confirmed.
Reinforcing the point, Accurium SMSF manager Matthew Richardson noted individuals have to apply for a director ID number even if the company in which they were a director was not established recently and the directorship in question had already ended.
“The only time you don’t need to apply for a director ID [in these circumstances] is [if you have] passed away,” Richardson explained.
He acknowledged these parameters will create compliance issues simply due to people’s ignorance of the rules.
“For people who have ceased being directors … and don’t intend to be a director again, then who’s going to inform them or follow up that they have obtained a director ID?” he asked.
Ellem clarified a person does not need to apply for a director ID number by 30 November 2022 if they were not director on 4 April 2021 and have not been appointed a director since that date, but they would need to obtain a director ID prior to taking on a directorship anytime in the future.
Further, he warned SMSF trustees not to be dismissive of this requirement as the Australian Securities and Investments Commission has already listed the associated penalties for non-compliance on its website.
These include a criminal penalty of $13,200 and a civil penalty of $1.1 million for failing to have a director ID when required to do so.
The application process for director ID numbers opened in November 2021.
