ATO, Compliance, SMSF

Regulator reminds trustees of release process

ATO release reminder

The ATO has reminded trustees they are required to respond to requests from members to release funds and has detailed the processes it expects will be used.

The ATO has reminded SMSFs they can release funds from a member’s superannuation account on the receipt of a release authority, but the processes involved will differ depending on conditions contained within each authority.

In an update on its website, the regulator highlighted that it issues six different types of release authorities covering excess concessional contributions, excess non-concessional contributions, excess non-concessional contributions tax, Division 293 due and payable, Division 293 deferred debt and a release under the First Home Super Saver Scheme.

Despite the specific differences in these release authorities, it highlighted there were common actions that were required of SMSF trustees regardless of which authority they received.

“The release authority includes a release authority statement and instructions for completing it. As trustee, you must provide this information to us to confirm that you have released the member’s money in accordance with the release authority,” it said.

“Depending on the type of release authority, this amount is either paid to us and we then pay it to the member, or directly to the member.

“A contravention will occur if you release this money before your member lodges an election form and your SMSF receives a release authority.”

It noted receipt of a release authority was dependent on whether or not the SMSF had an electronic service address (ESA). Those with an ESA would receive the authority via this method and a notification would follow from the SMSF’s messaging provider or fund administrator. Funds without an ESA would receive a paper version.

Responses to the release authority would also depend on the presence of an ESA and funds with an address could send a release authority statement (RAS) via the fund’s administration software, messaging provider or fund administrator, while those receiving a paper version would have to manually return the RAS.

In all cases the RAS should advise the ATO of the amount to be released, and where it is less than that requested in the authority, why the full amount could not be released. Payment should be made electronically referencing a payment reference number (PRN) provided during the ESA process or on the paper form.

“Remember to include the PRN when making the payment. If you receive multiple release authorities, do not send one bulk payment. The amount you advise is being paid in the RAS must match the amount paid and the corresponding PRN,” the regulator said.

Copyright © SMS Magazine 2024

ABN 43 564 725 109

Benchmark Media

Site design Red Cloud Digital