As 30 June approaches it is not just individual investors who need to have their affairs in order; trustees of self managed superannuation funds (SMSF) also need to ensure their fund is compliant before the financial year end, says Andrew Yee, director of wealth management at HLB Mann Judd Sydney.
Firstly, trustees of SMSF’s need to ensure that the fund’s auditor is ASIC approved and licensed, Mr Yee says.
“Since 1 July 2013 an auditor of a SMSF must be specifically registered and approved as a specialist SMSF auditor by ASIC. As this requirement did not exist prior to 30 June 2013, it was easier to qualify as an approved SMSF auditor”.
“Trustees of SMSFs can not automatically assume that the previous year’s auditor will be ASIC approved and licensed, as many existing auditors did not apply or are still to applying for registration,” Mr Yee says.
SMSF trustees also need to be aware of new penalties that will come into force in the new financial year.
“New penalties will apply for breaches from 1 July 2014. Previously, if trustees breached the rules, the ATO could declare the fund non-complying and subject the fund to a 45 percent tax on the value of assets.
“From 1 July 2014 the ATO will have the power to penalise the fund without declaring it non-compliant, depending on the type of breach that is involved
“The ATO can still, in addition to penalties, declare the fund non compliant. However, the change provides the ATO with a variety of enforcement options at their disposal.”
The penalty that will apply will ultimately depend on the nature and severity of the fund breach.
“One of the new penalties for breaching the rules is that the ATO will be able to force trustees to undertake trustee education,” Mr Yee says.
A third change that will apply from 1 July 2014, concerns the way that SMSF’s will be required to receive member contributions from employers. The change is part of the government’s SuperStream legislation, which aims to improve the efficiency of the superannuation system.
“This affects all superannuation funds, but trustees of SMSF are more likely to be caught out if they are not aware of the change,” Mr Yee says.
“Essentially, SMSF’s will need to be able to accept superannuation contributions electronically to comply with the SuperStream Data and Payment Standard.
“Contributions made by non-electronic means, such as cash or cheque payments, will not be acceptable.
“SMSF trustees will need an Electronic Services Address (ESA) for the delivery of contribution messages, and must provide the ESA, along with the SMSF’s ABN and bank account details to employers before 31 May, 2014.
“This will ensure the employer is able to comply with the new payment rules in time for the new financial year.
“Without this information, an employer will not be able to comply with the SuperStream requirements, and the ATO can penalise SMSF’s and the employer if they fail to provide this information,” Mr Yee concludes.
HLB Mann Judd Sydney is a firm of accountants and business and financial advisers, and a member of the HLB Mann Judd Australasian Association.
For more information please contact:
Andrew Yee – Phone: 02 9020 4213
8 April 2014