Administration, ATO, SMSF

Don’t cancel ABN in wind-up process

SMSF wind-up ABN

SMSF practitioners and trustees should not cancel a fund’s ABN during a wind-up process as the wrong timing of this action will freeze the procedure.

A technical specialist has warned SMSF practitioners and trustees not to cancel the Australian business number (ABN) of a fund during its wind-up process as this can prevent the final movement of monies out of the SMSF.

Heffron senior SMSF technical specialist Annie Dawson said the cancellation of an ABN linked to an SMSF should not be initiated by a practitioner or fund trustees in the wind-up process as it was an action carried out by the ATO after the final tax return for the fund was lodged.

“When the final return is lodged and processed by the ATO, this is where we get to see how everything lands because once the ATO processes the return, if there is a final tax return coming we will see that in the fund’s bank statements,” Dawson said during a recent online briefing.

“If we are also doing a final rollover of member benefits, we have to do that via SuperStream and remember we can’t use SuperStream if the fund’s ABN has been cancelled.

“The ATO will actually cancel the fund’s ABN as part of its processing of the final tax return for the fund. They used to cancel it within 14 days, but they have now extended that to 28 days to give everyone a little bit more time.”

She said SMSF practitioners working with trustees on a fund wind-up should stay in close contact as those 28 days were critical for enacting fund rollovers.

“The difficult bit will be making sure that you are aware or the trustee knows to inform you the fund has been processed and the final tax return received because if you don’t make a rollover within that timeframe, you will have to go back to the ATO and request them to reactivate the fund’s ABN,” she said.

“This can take more time as the ATO don’t have a special way of doing that. It literally requires someone to call the [superannuation inquiries] number and put that request through there.”

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