ATO Assistant Commissioners Superannuation Tara McLachlan and Dana Fleming recently spoke at the Self Managed Superannuation Fund (SMSF) Association Technical Days in various capital cities. The speech was mainly about practical considerations to be taken into account when setting up a new SMSF and during the first year of its operation. Other issues raised included:
- SMSF registrations: For 2017–2018 there were about 26,000 SMSF registrations, with 2,100 of these subject to further review. Of those reviewed, 621 (29%) had their Australian Business Number (ABN) cancelled and 336 (16%) had their details withheld from Super Fund Lookup.
- SMSF annual return lodgments: By the deferred deadline of 30 June 2018, 90% of SMSFs (as at 30 July 2018) had lodged their 2016–2017 SMSF annual return, and 3% had received a deferral based on the particular circumstances of the fund. Around 44,000 SMSFs made an election in their annual return to apply the transitional capital gains tax (CGT) relief in relation to the pension reforms.
- SuperStream for SMSFs: The ATO is working with industry on implementing the 2018–2019 Budget proposal to extend SuperStream to include SMSF rollovers. The measure is expected to start in late 2019.
- Exempt current pension income and actuarial certificates: 2016–2017 was a transitional year for exempt current pension income (ECPI), as some SMSFs went from using the segregated method to using the proportionate method (requiring an actuarial certificate). From 2017–2018 there will generally only be a few circumstances where an SMSF needs to get an actuarial certificate to claim ECPI, as follows:
- when the SMSF is paying a pension that is not an account-based pension;
- where the SMSF is required to use the proportionate method because a member has a total super balance above $1.6 million; and
- where the SMSF has a mix of accumulation and retirement-phase interests and chooses not to use the segregated method.