What is a section 52?
What is a Self Managed Superannuation Fund (SMSF)?
The Self Managed Superannuation Funds (SMSF) are privately managed trusts that are run by the trustees of the fund. All SMSF trustees are responsible for the compliance of their trusts with Australian superannuation legislation.
What are the key dates to lodge the annual SMSF tax return?
Here is a brief guide to the deadlines you are required to lodge the complete SMSF tax return:
First timer: If you are new to the market and lodging the SMSF annual tax return for the first time especially by yourself – then the annual tax return date for you will be 31st October.
If you have hired a tax agent or an accountant then you can get an extension to 28th February next year.
Late Payer: For SMSF’s who have failed to lodge their tax return in previous years– their return will be due on 31st October.
Why is it crucial to lodge an SMSF tax return on time?
It is imperative that your SMSF’s tax returns are completed and lodged on time because the Australian Tax Office (ATO) has been very strict on SMSFs with regards to three major aspects of compliance this year. These are:
- Non-lodgements or late SMSF tax return lodgements
- Compliance breaches – e.g. lodging without an auditor contravention report
- Lodging without unrectified auditor contravention reports
Out of all of these breaches, the ATO is mostly set on cracking down on late SMSF tax returns, with penalties being a potential possibility.
What are the financial penalties for submitting Late SMSF Tax Return?
Late SMSF tax returns could lead to a Failure to Lodge (FTL) penalty. The penalty rate will be calculated as one penalty unit for 28 days that the return goes over due. At the moment, each penalty unit will be $210.
The ATO states that for failure to prepare and submit financial accounts and statements, each trustee would be liable for 10 unit points for lodging a late SMSF tax return, which equals to a financial penalty of $2,100. If your trust has 4 members, this can mean a total penalty of $8,400.
What are the other penalties for submitting Late SMSF Tax Return?
Other penalties and consequences for late SMSF tax returns could involve the ATO directing the trustees to undertake educational courses to improve their compliance with SMSF laws and regulatory obligations, and to prevent them from further contravening any SMSF laws.
Also, according to the ATO’s new ruling that from October 1st 2019, if a late SMSF tax return is overdue for more than two weeks and the trustees have not applied or requested for a lodgement deferral, the ATO will change their status on Super Fund Lookup to ‘regulations details removed’ and declare the fund non-compliant, which means that the trustees will not be able to receive any superannuation guarantee payments.
What happens if you have a late SMSF Tax return in your hands?
First and foremost, call us. As your SMSF accountants, we will call the ATO on your behalf and try to get an extension for your late SMSF tax return, we may also be able to get the penalty waived or set up a payment plan for you so that you can pay off the amount owing over time and it does not put a great financial strain on you.
As your SMSF accountants – we promise to get on it straight away, help you get the situation under control, resolve any issues so that you will be back on track in no time!
Call us on 1300 212 663 to book an appointment to see one of our staff today.
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