Newsletter No. 1, January 2014

Lodgment due date for new SMSFs 

Self Managed Superannuation Funds (SMSFs) can be penalised by up to $4,250 for not lodging on time.

If you have established an SMSF anytime during the period 1 July 2012 to 30 June 2013, then you would need to have lodged an income tax return for your SMSF with the Australian Taxation Office (ATO) by 31 October 2013 if you prepare the return yourself (i.e. self preparer) or by 28 February 2014 if you use a tax agent to prepare and lodge your SMSF annual return.  Before you lodge your SMSF’s tax return, the financial accounts and statements of your SMSF need to be audited by an approved SMSF auditor.  You cannot lodge your SMSF tax return until the audit has been completed and signed off by your SMSF auditor.

The due date of 28 February 2014 is only for new SMSFs established in the last financial year.  SMSFs established before 1 July 2012 have a different due date. For details of the other lodgment dates, click here.

If you lodge your SMSF’s tax return after the due date, the ATO will impose a late lodgement penalty which is calculated at a base penalty rate of $170 for each period of 28 days or part thereof that the return is overdue, up to maximum of $850.  This penalty is increased to twice this if your SMSF’s assessable income or GST turnover is more than $1 million but less than $20 million.  For SMSFs with assessable incomes or GST turnovers of $20 million or more the penalty is five times the base penalty rate.

If however, you established your SMSF but your SMSF has not commenced operating, then you can advise the ATO in writing of this and the ATO will place a “return not necessary” on your SMSF record.   For example, if your SMSF was registered with the ATO in April, May or June 2013, but it had not commenced operating and it had not received any contributions or rollovers by 30 June 2013 it would not need to lodge a return.   If this applies to you, then because an annual tax return will not be required to be lodged with the ATO in its first year, the ATO’s supervisory levy of $321 will also not be required to be paid.

When applying for a “return not necessary” status, you will need to advise the ATO in writing:

  • that your SMSF did not hold assets and did not receive contributions or rollovers in the 2012 – 2013 financial year;
  • of the date your SMSF first held assets and commenced operating, and;
  • that your SMSF will lodge future tax returns.

If your SMSF needs to lodge the annual tax return, make sure you employ the services of an approved SMSF auditor and not just any auditor.  The accountant who prepared the tax return for your SMSF cannot also be the fund’s auditor.  The auditor needs to be a different person and someone who is registered as an approved SMSF auditor with the Australian Securities and Investment Commission.  You can check to see if your auditor is registered with ASIC by using “ASIC Connect” which you will find at www.connectonline.asic.gov.au.

Monica Rule worked for the ATO for 28 years and is a Self-Managed Superannuation Specialist Advisor. Monica is the author of “The Self Managed Super Handbook – Superannuation Law for Self Managed Superannuation Funds in plain English” www.monicarule.com.au. Her advice is general in nature and you should seek advice that relates to your specific circumstances before making any decisions.