SMSF registrations experiencing processing delays
With the ATO increasing its scrutiny of individuals looking to set up SMSFs in light of the COVID-19 crisis, there have been some processing delays with registrations, says an SMSF services provider.
Heffron Consulting senior SMSF specialist Alex Denham said when a new SMSF is established, the fund has 60 days to register the SMSF with the ATO by applying for an Australian Business Number (ABN) and tax file number (TFN), and electing to be regulated by them.
In an online article, Ms Denham said in the past the registration process could take up to 30 business days, but in more recent times, this has extended out to as much as 45 days.
“We understand the ATO has increased their scrutiny of individuals wanting to establish an SMSF in light of the coronavirus crisis,” she said.
For every new fund, she said, the ATO will review the trustees and the entities they have controlled, taking into consideration any history of insolvency, crimes related to dishonesty, previous SMSF history, personal lodgement and payment history, super balance and income and information about identities that have been used fraudulently.
“Where they are not sure of the fund’s eligibility based solely on the answers in the application form, the ATO withholds registration while they investigate. During this time, the fund will appear on Super Fund Lookup (SFLU) as ‘Pending’ or ‘Regulation details withheld’,” she noted.
Ms Denham said ensuring clients understand the implications of having outstanding ATO lodgement and payment history could help with setting client expectations up front.
Processing delays are more likely to occur, she said, where some of the required steps have not been taken, the name of the new fund has been used previously by another SMSF, the ATO can’t confirm the identity of all of the SMSF’s associates, or one or more of the trustees are not able to run an SMSF.
Miranda Brownlee
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.
