Lodging a Self-Managed Superannuation Fund (SMSF) annual return on time is an important part of meeting your lodgment obligations as a Trustee.
What if your SMSF annual return is lodged late?
From 1 October 2019, if an SMSF is more than two weeks overdue on any annual return lodgment due date and hasn’t requested a lodgment deferral, the (ATO) will change their status on Super Fund Lookup (SFLU) to ‘Regulation details removed’. The ATO is taking this approach because non-lodgment combined with disengagement indicates that the members’ retirement savings may be at risk. This status will remain until any overdue lodgments have been brought up to date.
What is the process?
On the first business day of each month, there is a two-step process for updating SFLU.
1. Where an SMSF trustee hasn’t lodged their SMSF annual return on time and they’re more than two weeks overdue, the ATO will change their SMSF regulation status to ‘Regulation details removed’ on SFLU.
2. Where all overdue lodgments are received for an SMSF during the previous month, the ATO will update SFLU to reinstate the SMSF’s ‘Complying’ status.
How will this change affect SMSFs?
Having a status of ‘Regulation details removed’ means;
a) APRA funds won’t roll over any member benefits to the SMSF and
b) Employers may elect not to make any super guarantee (SG) contribution payments for members of the SMSF.
What can you do now?
Contact us immediately if there are any potential delays in lodging your annual return.
What can SMSF Trustees/Members do if the status has changed to ‘Regulation details removed’?
While the fund’s status is ‘Regulation details removed’, members should alert their employer to make any SG payments into the employer’s default super fund or a fund of the member’s choice (other than the SMSF).
Where employers have not been made aware of the change in fund status to ‘Regulation details removed’, clearing houses, for example, Small Business Superannuation Clearing House (SBSCH) are doing their own checks on the SFLU and will not process SG payments who’s fund status has changed to “Regulation details removed’.
Once the SFLU status of the SMSF has been updated to ‘Complying’, members can request a rollover to their SMSF of any member benefits that may be held outside their SMSF.
When does the SFLU status update?
The SFLU status is automatically updated on the first working day of each month based on the fund’s lodgment status at the end of the preceding month. To ensure the fund status has been updated, check the SFLU and provide confirmation of the status change to your SMSF client. As mentioned above they may need to present the status update to their employer and/or APRA fund.
If you have any questions regarding the SFLU status of your SMSF do not hesitate to contact us on 03 9838 3055.
March 2020 ~ Kerrie Salvatore, Concise Super
© Concise Super 2020