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ATO action on overdue SMSF annual returns

The Australian Tax Office (ATO) is cracking down on self-managed super funds (SMSFs) that have overdue SMSF annual returns, particularly those with two or more returns overdue.

As part of its compliance action, the ATO is currently:
– Cancelling approximately 9,000 ABNs of SMSFs that show no evidence of operating
– Writing to SMSF trustees who are in pension phase to remind them that they still have a lodgment obligation
– Continuing to focus on SMSFs with high levels of income and/or high-value assets who also have overdue returns
– Taking further compliance and audit action on selected SMSFs
– Visiting selected tax agents to obtain feedback on why their SMSF clients’ lodgments are overdue
– Contacting tax agents by phone to obtain an agreed date for lodgment of overdue SMSF annual returns.

SMSFs that do not meet the agreed lodgment timeframes will be subject to serious financial implications.

Posted on 7 December '17 by , under Super.

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Superfund categories and what they mean

There are four different categories of super funds. These have different primary features and are more applicable to certain people than they are to others.

Retail super funds

Anyone can join retail funds. They are mostly run by banks and investment companies:

  • Allow for a wide range of investment options.
  • Financial advisors may recommend this type of fund as they receive commissions or might get paid fees for them.
  • Although they usually range from medium to high cost, there may be low-cost alternatives.
  • The companies that own these funds will aim to keep some of the profit they yield

Industry super funds

Anyone can join bigger industry funds, but smaller ones may only be open to people in certain industries i.e. health.

  • Most are accumulation funds but some older ones may have defined benefit members
  • Range from low to medium cost
  • Not-for-profit, so all profits are put back into the fund

Public sector super funds

Only available for government employees

  • Employers contribute more than the 9.5% minimum
  • Modest range of investment choices
  • Newer members are usually in an accumulation fund, but many of the long-term members have defined benefits
  • Low fees
  • Profits are put back into the fund

Corporate super funds

Arranged by employers for employees. Large companies may operate corporate funds under the board of trustees. Some corporate funds are operated by retail or industry funds, but availability is restricted to employees

  • If managed by bigger fund, wide range of investment options
  • Older funds have defined benefits, but most are accumulation funds
  • Low to medium costs for large employers, could be high cost for small employers

Self-managed super funds

Private super fund you manage yourself. Many more nuances to this type of fund. Most prominent feature is the autonomy over investment.

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