After a tumultuous 2022 year, 2023 is finally here, a new year means changes and the SMSF space is no different. If you’re thinking of starting a new SMSF, the ATO has now changed the registration process which removes the ability to add the SMSF bank account details to the online and paper application for an ABN registration of an SMSF.
Previously, after the SMSF is established and trustees have been appointed, the trustees then had 60 days to register the SMSF with the ATO by applying for an ABN through the Australian Business Register. That process included a section where bank account details of the SMSF could have been added, along with other information such as the TFN for the fund.
However, due to the recent explosion in fraudulent schemes targeting SMSFs, this feature has now been removed, in a bid to protect the retirement savings of Australians. New SMSFs will now need to provide the ATO with their bank account details after the SMSF registration process. This can be done through the online portal for businesses, via phone, or through a registered tax agent.
New SMSFs with members that are likely to request a rollover should be extra careful as both the SMSF bank account details and the electronic service address is required to be provided to the ATO before any rollover is requested. Otherwise, the rollover will either be unable to be processed or delays will be experienced.
If you’re contemplating starting an SMSF with a corporate trustee, you’ll need to ensure that the directors of that corporate trustee apply for Director IDs before the appointment is made through the Australian Business Registry Services (ABRS). The director ID is a unique 15-digit identifier that will follow each individual through their business life and was introduced as a part of a suite of measures to combat phoenixing and other illegal activities. The process is free, simple, online and only requires individuals to confirm their identity. Every individual must apply for their own director ID, and no one else can apply on their behalf.
The Director ID regime also applies to existing directors of corporate trustees of SMSFs. For individuals that first became a director on or before 31 October 2021, the deadline to apply was 30 November 2022, which has passed. Similarly, individuals that first became a director of a corporate trustee between 1 November 2021 and 4 April 2022 have to apply for a director ID within 28 days of appointment. However, the ATO has noted that those who missed the deadline can still apply for a Director ID and that it is “taking a reasonable approach to those directors who try to do the right thing”.
Those individuals that are unable to apply by the various deadlines can apply for an extension of time to apply. It was estimated by the ATO at the end of 2022 that around one million directors have not applied when required to do so, thus individuals are reminded that it is a criminal offence if Director IDs are not applied for on time, and maximum penalties of $16,500 (criminal) and $1,375,000 (civil) may apply.
Whether it is to establish a new SMSF, or matters relating to your existing SMSF, we have the expertise to deal with all facets relating to running, administration, and compliance of these complex structures. Contact us today.