Speaking in a recent CFS FirstTech podcast, SMSF Alliance principal David Busoli said one of the major issues that can cause delays with rollovers through SuperStream is where the SMSF is not appearing on Super Fund Lookup.
Mr Busoli explained that where an APRA fund is going to move monies over to an SMSF, it will first check Super Fund Lookup to see if that fund is displayed there to ensure it is registered and compliant.
“If the fund isn’t there, then the APRA fund will not activate the rollover,” he said.
Mr Busoli explained that there are a few different reasons why the search on Super Fund Lookup with fail.
“One reason is where there’s a brand new fund and Super Fund Lookup hasn’t been updated. When you have a brand new fund, one of the first things the member wants to do is roll money in from their APRA fund,” he said.
“In the past, we have been able to start a pro forma bank account and then when the ABN and TFN was issued by the ATO and it went onto Super Fund Lookup, which is generally around about 24 hours from that, the member was ready to go.”
However, under the current rules, Mr Busoli said a member cannot complete their bank establishment details until after the ABN and TFN has been issued.
“So that means that even though it’s on the Super Fund Lookup, they may not have the bank account in order,” Mr Busoli told CFS head of technical services Craig Day.
“So we have a juxtaposition between the issue of Super Fund Lookup and the commencement of the bank account which has to be sent to the ATO.”
Mr Busoli said late lodgements also create challenges.
“The other issue is that SMSFs are a little tardy about doing their returns. We have about a 98 per cent on time lodgement rate and some of that is in spite of the kickback from trustees, and the 2 per cent that we can’t crack are the trustees that [refuse] to perform the small number of of activities that they need to do. These trustees will then decide they want to do a rollover,” he said.
As most SMSF professionals would be aware, Mr Busoli said the ATO will remove the fund from Super Fund Lookup if they have not lodged by the lodgement date or the extended lodgement date that might apply.
“It’s then that these trustees then suddenly swing into action and want to get things done quickly. The problem they then have is that we receive the information, it has to go to audit, and it can take a little while before it actually does get lodged,” he explained.
“Then when it is lodged, the ATO won’t update that list until the first week of the following month. So if it was lodged, for example, on the first of the month, it’s not going to get back on the Super Fund Lookup list for four or five weeks.”
It seems to me that anything that is in the favour of the ATO happens at warp speed, but if we want something done, it takes an arm and a leg and triple the time…….
The biggest issue is the ATO as usual, They are very quick to remove a fund from Super Fund look up, but then very slow to return the fund to Super Fund look up after compliance is met. The ATO is moving at glacial speeds with everything at present and it is extremely frustrating for tax agents. I’m not sure if its a coincidence, but it does seem to coincide with the new government taking power…
That’s been happening for a LONG TIME before the current Government.
I have no idea why the SFL updates are only on the first business day of each month for funds being removed for late lodgement or reinstated when back up to date. Probably someone in the ATO has to upload a .csv file. It should move to a daily or even weekly sync.
By comparison, if a new SMSF is put through a review/audit, once they’ve ‘passed’ it shows up the next day – presumably because the case officer enables the registration status to be updated.
That’s funny every time I have applied for a Super Fund ABN prior to the last few months it was almost always issued immediately. I have one in progress for a new SMSF atm that took the full 28 days for the ABN to be issued, and they are now saying it will take another 28 days for the fund to receive complying status on SFL. The trustees/members have no current or past outstanding compliance or debt issues with the ATO, so there is absolutely no reason the application should take so long. This never happened to me under the previous government, as I said could be a coincidence….but feels like everything has been slowed down very recently.
And director identification numbers. I am sure that will cause problems when establishing a new fund. DIN’s required before you can even order the company. Not sure why, because ASIC have no provision to add the DIN’s to their system, that they current indicate on their website.
And at present MyGov is not working smoothly, so a potential corporate trustee is unable to get their DIN to set-up their Trust. . . . . . so, all in all, technology is not working well enough to ensure the functionality. The ATO really need to re-set rules on their time requirements, because many issues are now down to software/IT failures.