SMSF Tax Returns

The Australian Taxation Office (ATO) treats a self-managed superannuation fund like a person – any income it receives will be taxed. However, a special concessionary tax rate of 15% generally applies to such income.

Your SMSF tax returns (NAT 71226) provide the Australian Taxation Office with more than just income data. It also covers regulatory information, member contributions and SMSF supervisory levy payments – and the ATO uses it for statistical purposes. Your SMSF audit must be finalised before you lodge your tax return. Remember to include the correct auditor details.

Let us help you meet ATO audit requirements.

Timely lodging self-managed super fund annual income tax returns is a critical responsibility for SMSF trustees. And remember that each member must also submit an annual individual tax return, unless

  • They have no taxable income, or
  • Their income falls below the tax-free threshold, or
  • Their only income is from a retirement phase pension.

Lodgement of SMSF Tax Returns (SAR)

The Australian taxation law is clear, but the details are intricate. Therefore, most SMSFs seek professional advice and taxation services to ensure ATO compliance.

Which SMSFs Must Lodge SMSF Tax Returns?

All SMSFs with assets must submit a tax return every year, even if no income was generated or the fund is 100% in the retirement phase.
Self-managed superannuation funds without assets in their first year can apply for an RNN (return not necessary) from the ATO

When Is Your SMSF Lodgement Date?

The date depends on individual circumstances:
The lodgement date is 31 October (or the next business day if this is a holiday or weekend) if:

  • You are a new self-managed super fund, and you are lodging your own tax return, or
  • You missed the previous year’s lodgements/dates

An exception to this rule is if

  • You are a new self-managed fund, and a tax agent is lodging your return, but the ATO reviewed your SMSF at registration. The ATO will notify you if this is the case.

The lodgement date is 28 February if:

  • You are not new, and you are lodging the SAR yourself
  • This is your first financial year, and a tax agent is lodging your return
  • You previously had an RNN, and a tax agent is lodging your first return

The 28 February date is for you to lodge returns for the previous financial year, ending 30 June.

If a tax agent is lodging your return, they will tell you the due date. The ATO provides tax professionals with a list of due dates, depending on specific technical circumstances.

What Happens If Your SMSF Annual Return Is Late?

If you think your lodgement will be late, it’s essential to inform the ATO and request a deferral. It’s also a good idea to talk to a registered tax agent about your options.

If your SAR is more than two weeks overdue

  • The ATO will change the status of your SMSF on the Super Fund Lookup to reflect that you are not complying.
  • You can be subject to penalties and lose your SMSF’s tax concessions.

Change Of Status On The Super Fund Lookup

The Super Fund Lookup is the ATO’s register of the compliance status of SMSFs, and it is updated on the first business day of every month.

Employers and APRA funds can use it to check that an SMSF is eligible for contributions, transfers or rollovers.

If your fund income tax return is late, the ATO will change the status to “Regulation details removed” and issue a certificate of non-compliance.

If your SAR is more than two weeks overdue

  • APRA funds will not roll over any member benefits to the SMSF
  • Employers cannot make any contributions to the fund
  • You must alert your employer to pay superannuation guarantee (SG) contributions into the employer’s super fund, or you can choose another fund.

The status will change to “Complying” only after all overdue lodgements have been brought up to date and the ATO issues a compliance certificate. Members can then request employer contributions be made into the fund and rollover benefits from other funds.

Special note on ATO Web Services for Super Fund Lookup

From 31 July 2021, please ensure that security settings for data encryption on your PC are updated to TLS vs 1.2. The ATO web services will no longer support older versions. You can find out how to enable TLS 1.2 here.

Failure To Lodge On Time (FTL) Penalty

The ATO tends not to be punitive with taxpayers who engage with them and want to get things right.

So, the ATO is unlikely to apply the failure to lodge on time (FTL) penalty to isolated cases of late lodgement of SMSF tax returns. However, they can, especially if they believe that you are wilfully not lodging or are doing nothing about the breach.

There are different penalties. It starts at one penalty unit per 28 days (or part thereof) for a small entity to a maximum of five units. The number of penalties is multiplied, depending on the size of the entity.

The current penalty per unit is $222.

Here Is some good news.

You have a “safe harbour” from the FTL penalty if you have engaged a registered tax agent to lodge your return, you have provided them with all the necessary documents, and they were not reckless or intentionally disregarding the law.

Interest On Late Payments

Even if you miss the due date, try to have your return lodged as soon as possible to avoid interest penalties. Payment must be made within 21 days of the lodgement date.

For example, if your lodgement date is 31 October, the due date for payment is 21 November, even if you lodge late. Interest may apply to any amount you owe after 21 November.

Why Use SMSF Engine As Your Tax Agent

We offer comprehensive and cost-effective tax services to accountants and advisers of SMSF funds and also directly to SMSF trustees.

We have a team of highly qualified SMSF tax accountants. They are 100% Australia-based and have many years of experience dealing with the Australian taxation office.

Bundle Tax Lodgement With Administration and Audit Services

If you use our administration services, we can also act as the tax agent to lodge your fund’s annual SMSF tax return.

We can bundle tax agent services with your administration package for the most cost-effective options.

  • Tax Agent services are included in the cost for our Daily Plus package
  • Tax Agent services can be added to the Daily package for just $352 (which includes Quarterly BAS and end of year return lodgement)
  • Tax Agent services can be added to the Annual package for $176 (which includes only the end of year return lodgement)

The Daily and Annual packages include a pro-forma tax return. It will help you if you are doing your own lodgement.

If you use our audit services, we will refer you to an independent SMSF auditor, ensure all your documentation is in order, and coordinate audit and tax office requirements.

See here for a complete list of our services and fees.

And here is some more good news. Even if you have an SMSF tax problem or taxes are owing, we can help you sort it out.

  • We will deal directly with the ATO on your behalf
  • We will keep them informed about progress towards meeting deadlines and when we expect to finish

If you are an accountant or financial adviser to SMSF funds, download our expression of interest form or start an order to discuss handling your funds’ SMSF tax returns.

What information do we need?

If we administer your SMSF, we will already have most of the Information needed for SMSF tax returns. This includes items such as your Australian business number (ABN), details of bank accounts, and receipts or statements for the expenses you are claiming as deductions. We will ask you if we need anything else.

Tax Agent Services

If you use our administration and audit services, we can also act as tax agents for the annual tax lodgement for your funds annual SMSF return. For details, please contact SMSF Engine.

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