The regulator says that release authorities are documents issued by the ATO to super funds, authorising the release of money from a member’s super account to pay specific liabilities.
These include excess concessional contributions, excess non-concessional contributions and Division 293 tax assessments.
It said it is seeing a rise in SMSFs that receive a release authority and are either not responding within 10 business days as required or responding incorrectly.
This involves both releasing the requested amount and submitting a release authority statement back to the Tax Office.
Failure to meet these obligations may result in significant penalties for the fund.
It continued that the SMSF trustee must make sure they have effective processes in place to respond to release authorities promptly and accurately. Furthermore, it said supporting the fund’s members in meeting their tax obligations is a shared responsibility, and timely action helps avoid negative consequences.
To stay compliant, the ATO said trustees must check their fund’s mail regularly, explaining that release authorities are sent via secure channels, so timely access is essential.
Trustees should set up alerts or reminders and use calendar tools or SMSF software to track key deadlines.
Moreover, it urged trustees to work closely with their administrator or tax agent, as they can help interpret the release authority and manage the response process.
The Tax Office also said it is important that trustees keep their fund’s contact details up to date with the ATO, including keeping the fund’s electronic service address current, as this ensures the trustee will receive important correspondence without delay and can action release authorities faster.
Finally, trustees must fully understand their obligations and familiarise themself with the ATO’s guidance on release authorities and ensure their fund’s processes are adequate.
