SMSF Non lodgement on ATO’s scanner: Be-Aware!

The ATO has undertaken a drive to declare SMSFs not lodging their tax returns as non-compliant. A non-compliant SMSF means that it is not eligible for concessional tax rates and hence will be taxed at 45%.
The lodgement of a Self Managed Super Fund (SMSF) annual return is more about reporting of the super regulatory information than merely lodging a return. SMSFs are formed with an intention to exert greater control on the retirement monies of individuals by investing in a preferred way which is intended to provide higher returns than standard industry super funds. This is in addition to the highest possible level of control granted to the trustees or members of an SMSF. SMSFs are required to appoint an auditor to conduct the financial and compliance related audits and duly lodge the returns in order to report that the SMSF is operated in a compliant manner.
Hence, it is compulsory for Australian resident super funds to lodge tax returns, regardless of how much income they receive.The Australian Taxation Office has been tirelessly chasing up on inactive Self Managed Super Funds who have not been actively operating their SMSFs or not been lodging their annual returns. On one hand there are increasing number of SMSFs which are being registered and on the other hand many of them are being declared as non – compliant because these entities are not lodging their annual returns or do not actively trade.
ATO warns that if the tax returns for the funds remain overdue for lodgement for longer than reasonable time then they could face serious consequences. This could include SMSF trustee paying heavy penalties, declaring the SMSF as non – compliant, creating automated default assessments by the ATO or even disqualifying a trustee for persistently not lodging returns.
The Australian Taxation Office’s website provides more information pertaining SMSFs and tax return lodgements but if you are still unsure about your circumstances, please feel free to contact us to know your tax obligations. Our experienced team at A One Accountants would be able to assist you with any concerns you may have. Give us a call on 03 8609 1889 and speak to one of our friendly staff and we shall address any queries you may have.