2010 SMSF Tax Returns - Deadlines & Regulations
by Ian Morella, Director of Accounting
Deadline For New SMSF’s
Deadline for newly registered Self Managed Superannuation Funds
The Australian Tax Office (ATO) is advising that newly registered Self Managed Superannuation funds (SMSFs) must lodge their 2010 annual tax returns by 28th February 2011.
For anyone with a newly formed SMSF, it’s essential to allow your Taxation Accountant enough time to prepare your audit report and tax return before the February deadline.
You may be eligible for a deferral if you believe you are unable to prepare and lodge your return before February 28th. If this is the case, please contact our office so we can request a deferral from the ATO. Please note a deferral request must be made before the deadline.
ATO Targeting Loans and In-House Assets
In selecting cases for audit this year, the ATO will focus on SMSF’s with repeated breaching of the rules regarding loans and in-house assets (IHA).
Loans
For a payment of money to a member of a SMSF to be considered a loan, there must be an intention by both parties at the time of payment that the money will be repaid.
Where the ATO finds that an early access breach has occurred, in addition to any action it will take against the SMSF, the trustee(s) will be assessed personally for the amounts.
Breaches of IHA rules
In following up past reports of IHA rule breaches, the ATO has found that in most cases, trustees have been using their retirement benefits to support related businesses and are clearly exceeding the 5% limit allowed for this practice.
A significant number of the SMSF’s it classified as ‘non-compliant’ last financial year had breached IHA rules.
Non-complying SMSF’s lose access to concessional tax treatment, and their income is taxed at the highest marginal rate.
The ATO also taxes their total assets (less any member contributions for which no tax deduction has been claimed) at the highest marginal tax rate. The funds are taxed at this higher rate until the ATO reinstates their complying status.
Ensuring you are complying with ATO regulations
SMSF’s have many regulations set by ATO, and it’s essential you fulfill all requirements in order to avoid any penalties which may apply.
If you would like any advice or assistance in the lodgement of your new SMSF, or information on loans or IHA regulations, please contact our Client Liaison Office on 1300 726 082 who can book you an appointment with a John Hopkins Taxation Accountant.
Source: TaxAgent Magazine, December 2010
To arrange an appointment with a John Hopkins Taxation Accountant or Financial Adviser, please contact our Client Liaison Officer on 1300 726 082 or click here.