SMSF accountants and tax agents that do not inform the ATO a fund member will be in scope for the Division 296 impost may be considered as misleading the regulator, but this view will be depend on their knowledge of their client’s affairs, a technical specialist has noted.
Heffron SMSF technical and education services director Leigh Mansell said the regulator had indicated during a forum in April that where a practitioner was using an actuarial certificate to divide up Division 296 earnings among fund members, any indications one of those is required to pay the new impost must be flagged.
“The ATO said is if you know you have a client that will be in scope, so you can see clearly from the financial statements for the fund you have got a client with more than $3 million in their SMSF, they will expect you to report the Division 296 earnings as part of the tax return for that particular year end,” Mansell said during a recent technical briefing.
“What the ATO also alluded to was if you know somebody is in scope but don’t report it, you are at risk of making a false and misleading statement.
“It would be different if you did the return for the SMSF and could only see a balance of half a million and had no knowledge whatsoever of other funds of which your client was a member.
“For instance, if you were thinking you don’t need to do any reporting for Division 296 earnings because they’ve only got that half a million, but unbeknownst to you they also have got $6 million in another fund.
“In those cases, I can’t see how you could be seen to be making a false or misleading statement, unless you knew, but the ATO could still come knocking and say: ‘You will need to amend that return, get it re-signed and lodge it again with the numbers on it.’”
Heffron head of education and content Lyn Formica added that requests have been made via ATO working groups for tax agents to be given a list of SMSF fund clients that are in-scope members for Division 296 purposes.
“They will be historical, but would give a bit of a heads up knowing which funds are going to be in scope, particularly if their balance inside the superannuation fund is not more than $3 million, but they have money outside,” Formica said.
“We would like to get the actuarial certificate, fill out the forms and do it the first time around rather than having to amend the return when we get a notification that we had an in-scope member.”
Jason Spits
SENIOR JOURNALIST
Jason is a senior journalist with Benchmark Media and writes for the selfmanagedsuper website and magazine and smstrusteenews website. He has covered financial services since 1999 and has written about life insurance, superannuation, investment management and financial advice, in both a freelance and in-house capacity, and also did a brief stint as a media manager for an industry association. He has been the editor of trade titles Money Management and Financial Standard, and was most recently senior journalist with life insurance title Riskinfo.
Articles by Jason