An SMSF is a type of trust and cannot be dormant like a shelf company. An SMSF should be operative as soon as it’s established. For this reason, Superannuation Warehouse charges a fee of $150 when setting up an SMSF. This is regarded a non-concessional contribution to the Fund and this is the action that brings the SMSF into existence.
If there’s no further activity in the SMSF, say for the first year, a NIL tax return needs to be lodged. Note the Supervisory Levy is still payable even with a low activity Fund.
New rules for newly established SMSFs
From 1 January 2015, all SMSFs need to lodge an SMSF Annual Tax Return in the year they were established. This is required even if no assets are held in the Fund.
In previous years it wasn’t necessary for a new SMSF to lodge an Annual Tax Return until it held assets. There was an amendment announced by the ATO that a fund can no longer avoid lodging an annual return.
Superannuation Warehouse charges a fee of $150 when setting up an SMSF. This is considered a non-concessional contribution to the Fund by the Members. Therefore the Fund now ‘holds an asset’, and an ABN can be applied for. This fee will be expensed in the Income Statement of the SMSF in the first year of operation.
From 1 January 2015, it is an ATO requirement that an SMSF must now be active when establishing the SMSF.
FAQs (click on the question to reveal the answer)
A: Previously the ATO allowed SMSF’s to lodge a Return Not Necessary (RNN) if no assets were held in the SMSF.
This exception for first year lodgements has been removed from 1 January 2015. All new SMSFs registered on or after 1 January 2015 must lodge an SMSF annual return.
This change ties in with the introduction of the ABN entitlement tool. RNNs will no longer be granted as ALL funds must hold assets before they can register for an ABN.
If, however, an SMSF was registered before 1 January 2015, it is acknowledged that some Funds may have been set up without assets. On the provision that certain criteria are met, a RNN may be applied for the 2015 financial year only if the SMSF meets all the following conditions:
* was registered in the 2014-15 financial year;
* was not legally established by 30 June 2015;
* had not received contributions or rollover amounts by 30 June 2015; and
* has received contributions by the date of the request for a RNN.
Alternatively the SMSF can ask to have the SMSF’s registration cancelled and re-register once assets are set aside for the Fund.
A: Yes, the levy payable now sits at $259 and is payable in advance. A newly registered SMSF will have to pay the levy twice ($518= $259 + $259) in the first year that the fund was established.
Note: If you register a new SMSF during the 2015/2016 financial year, your SMSF can expect to pay a $518 for the ATO supervisory levy (representing the 2015/2016 and 2016/2017 levy) at annual return lodgement time. If you registered a new SMSF during the 2014/2015 financial year, likewise you can expect to pay $518 for the ATO supervisory levy when lodging the 2014/2015 SMSF return.