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.
