SMSF Adviser was made aware of several complaints stemming from the new SMSF registration rules introduced in January
As a result, the ATO has issued new guidance for those new funds that hit roadblocks where members are retired.
“If you expect to receive a rollover, transfer or contributions in the near future, an SMSF can be established with a nominal amount (for example $10). Once an ABN is issued, a bank account can be opened and the $10 deposited. The $10 is regarded as a contribution and allocated to a member,” the ATO stated.
“Where a member cannot contribute to the SMSF (for example, they are 65 or over or do not meet the work test) we can apply an administrative discretion to allow this nominal contribution. In all cases the nominal contribution must be allocated to the member solely for the purpose of registering the SMSF,” the ATO said.
“The member must receive further money into the SMSF (such as a roll-over) before the end of the income year the fund was established.”
What a lot of rubbish, a contribution allowed under an administrative discretion providing the rollover is received before the end of the income year the fund was established. Therefore only start new funds in July to allow for the problems encountered when rolling over from a public offer or especially an industry fund. Both will not roll over the money until it appears on the super fund lookup site which takes how long at the moment? Also has anyone thought through the tax issues on the contribution & the effect, albeit minor, on the taxable and tax free components that exit in the rolled over sum – particularly if it was 100% tax free. Also have the Trustees knowingly breached the legislation, does the auditor need to lodge a breach notice. Do actuaries need to be involved at year end. When will this madness stop.