The ATO announced last week that it will soon be contacting trustees of new SMSFs that have not lodged an annual return and where it has no records of them holding assets.
These trustees will be asked to confirm that their fund holds assets and provide documentary evidence of when assets were first held by the fund.
The fund’s registration will be cancelled if a response is not received within 28 days and the ATO’s records continue to show that an annual return has not been lodged and the fund doesn’t hold assets.
Trustees and advisers should note that new rules now enable SMSFs that didn’t have assets during the first year it was registered to flag the SMSF’s record as 'return not necessary'.
However, in order to apply for a return not necessary classification, the trustee needs to confirm in writing that although registered, the fund had no assets and did not receive contributions or rollovers in the first financial year of its operation.
Further, the trustee needs to have documentary evidence of the date the SMSF first held assets and commenced operating, and confirm the fund will be lodging future returns.