New SMSF Regulation Details Withheld
Occasionally the ATO will undertake a detailed review of a new SMSF before they approve its registration on Super Fund Lookup and update the status to Registered. When this happens the status for the SMSF will be listed as ‘Regulation details withheld’.
This article tells you what happens when the ATO audits the setup and registration of your new SMSF.
The ATO will contact you
When the ATO reviews your SMSF registration they will contact you via phone and/or email and mail. Sometimes the ATO just needs to confirm some personal details as there could be a mismatch between their records and what was submitted during the online ABN application.
Where the ATO does a more detailed audit of your SMSF registration, after contacting you via phone they will send you a letter titled “We are auditing your application for self-managed superannuation fund registration”.
This letter will ask you to send the following documents to the ATO:
- copy of the trust deed;
- copy of any instruments varying the trust deed;
- copies of meeting minutes;
- evidence of account/s held by the fund at banks and other financial institutions (including share trading accounts), the evidence should be in the form of a bank statement or letter issued by the bank/financial institution;
- details of the investment strategy prepared for the fund including any asset acquisitions;
- copies of the acquisition or transfer contract for all assets acquired by the fund if applicable;
- details (including amounts) of any rollovers/proposed rollovers from commercial or industry funds to the SMSF, including the benefit statements issued by the commercial or industry funds;
- details of any rollovers proposed from other SMSFs for each member of the fund. The details must be in the form of a member benefit statement and/or letter issued by the trustees of the other SMSF;
- copy of the signed trustee declaration form (publication number NAT 71089) for each of the directors of the corporate trustee;
- copy of a bankruptcy discharge letter for any individual member/trustee of the fund who has previously been declared bankrupt;
- details and/or supporting evidence (such as invoices) of any commissions, fees or other payments made, or intended to be made, in relation to the setting up of the fund and/or rollover or payment of superannuation benefits to members (including date, amount and reason for the payment, name and ABN/TFN of the individual or entity to whom the payment was made).
The majority of the above are included in the SMSF Establishment Documents that you signed when you set up your SMSF with us. We can also provide a letter from our cash account partner to confirm the bank account details as well as an invoice for the SMSF setup fee you’ve paid.
The only item that you will need to provide in addition will be copies of your existing super fund statements for any super accounts you plan to transfer to the SMSF.
Questions the ATO may ask
The following are common questions (and example answers) the ATO may ask you about your SMSF. The majority of these questions are based on information contained in the ATO Trustee Declaration that you signed when you set up your SMSF.
The list of questions below is comprehensive, however, it is unlikely the ATO will ask all of them. Their questions will be customised to your situation and the details of your SMSF application.
When did you set up your SMSF?
- Provide the date you signed your SMSF trust deed and associated documents
Who is your SMSF trustee?
- Provide the name of the trustee company of your SMSF or the names of the members if you’re using individual trustees
Who are the directors of the trustee company?
- Provide your name(s) – i.e. all members of the SMSF will also be directors of the company trustee
Who set up the SMSF for you?
- Grow SMSF is the tax agent
What exactly did they do for you?
- I/we requested StakeSMSF set up the SMSF on our behalf. They set up the trustee company, organised the trust deed and all associated documents and submitted the ABN application
What is the purpose of an SMSF?
- An SMSF is for the sole purpose of providing retirement benefits for the members (or dependents if the members die before retirement)
What is the purpose of the SMSF trust deed?
- It contains all the rules of the SMSF that trustees and members have to follow – i.e. the procedures that have to be followed
Did you set up a bank account? What name? Which bank? Who are the signatories?
- An application to set up an account has been submitted with (bank name: e.g. Macquarie). This account will be linked to our Stake trading account
- The account is in the name of the SMSF
- We are the only authorised signatories on the account
How much will the rollovers be from your existing super funds?
- Provide details of the amounts
- If the total amount being transferred is comparatively low (i.e. less than $100,000) you may be asked to provide more information on why you’re starting an SMSF
- The ATO does not specify a minimum amount but they want to ensure you’re setting up an SMSF for legitimate reasons and not for illegal early access
What do you plan to do with the rollover monies?
- Implement the investment strategy of the fund
How do you plan to contribute to the SMSF?
- Employers will make contributions
- Mention the possibility of making additional personal contributions if applicable
What documents have you signed so far?
- Resolution to set up the trustee company;
- SMSF trust deed;
- Member applications;
- Consent to act as directors of trustee company;
- ATO Trustee Declarations
- Auditor Appointment Minute (ASF Audits – one of the largest independent SMSF auditors in the country!)
- Initial Investment Strategy
What are your annual obligations?
- Have the annual accounts completed
- Have the accounts audited
- Lodge an SMSF tax return
- Review our investment strategy (although probably will do more often as actively managing the investments)
What are the annual SMSF fees for accounting, audit, and the ATO levy?
- StakeSMSF is charging a low annual fee which includes the independent audit
- We also know we have to pay the ATO levy of $259 as well as the $55 ASIC fee for the company
Did someone tell you that you can access the money in the SMSF for personal purposes?
- No. I/we understand that this is not possible.
When can you access the money in your SMSF?
- Preservation age is 60, but we have to be retired, otherwise when only can access at age 65
How does the ATO deal with non-compliance?
- As per the trustee declaration:
- impose administrative penalties on me
- give me a written direction to rectify any contraventions or undertake a course of education
- enter into agreements with me to rectify any contraventions of the legislation
- disqualify me from being a trustee or director of a corporate trustee of any superannuation fund in the future
- remove the fund’s complying status, which may result in significant adverse tax consequences for the fund
- prosecute me under the law, which may result in fines or imprisonment (although no one has ever been sent to prison!)
What investments do you plan to make with your SMSF?
- Provide details as per your investment strategy
Why has the ATO selected your SMSF for review?
The ATO has indicated they look at the following for every SMSF registration they receive:
- history of insolvency
- crimes related to dishonesty
- previous SMSF history
- personal lodgment and payment history
- super balance and income
- information about identities that have been used fraudulently
Where the ATO has to undertake a manual review for your SMSFs application it can take up to two months.
Delays can arise if the ATO is unable to reach you via phone so it’s important to answer calls from any unknown numbers if you are waiting on the ATO to approve your application.