The ATO has cautioned people looking to establish a new SMSF to avoid using names that are similar or identical to Australian Prudential Regulation Authority-regulated funds and to ensure any name chosen is consistent across all related documentation.
In a number of updates on its website aimed at SMSF practitioners and trustees, the regulator noted the choice of a name was a key step in the establishment of a fund, which usually occurs when the trustees sign the trust deed.
“When selecting a name for your SMSF, don’t use names that are identical or similar to another fund’s name. For example, if you’re rolling your super benefits over from a retail or industry fund, you should avoid using that fund’s name for your SMSF,” it said.
“If you or your client use a name similar or identical to industry and retail funds regulated by the Australian Prudential Regulation Authority when setting up an SMSF, this may result in confusion and delays.”
It recommended trustees and practitioners use the Super Fund Lookup website to check if a name was already in use or similar to another fund’s name and to ensure the establishing documents correctly recorded the chosen name.
“The name of the SMSF you put on the fund’s registration form must also match the name you used when you created the fund’s trust deed. This will prevent delays with your SMSF registration,” it said.
It highlighted the selection of a name formed part of a number of steps to register a fund and get an Australian business number (ABN), with the latter having to take place within 60 days of the establishment of the SMSF and trustees being appointed.
In a related update, the ATO noted this process often fell down due to trustees not having completed a number of steps.
“Two common errors in applications to register an SMSF and get an ABN are the SMSF trust is not set up correctly before applying for an ABN, including setting aside an asset as the SMSF’s property, [and] the details of the members, trustees or directors of the corporate trustee are incorrect or incomplete,” it said.
As such, it added that before new trustees register a fund they must already have chosen their trustees, and where a corporate trustee was in use, either created a company or checked a pre-existing company can act as corporate trustee, as well as created a trust and transferred an asset to it.
