Regulation round-up

Member numbers

Treasury Laws Amendment (Self Managed Superannuation Funds) Bill 2020

This bill includes the proposal to increase an SMSF’s member limit from four to six and is still before the Senate. While this legislation increases the number of members allowable in an SMSF, for individual trustees it will still be important to check whether the relevant state/ territory laws limit trustee numbers.

The legislation is proposed to take effect at the start of the quarter following royal assent. If this is granted in March, it would make 1 April the start date.

While this legislation increases the number of members allowable in an SMSF, for individual trustees it will still be important to check whether the relevant state/territory laws limit trustee numbers.

Indexation of TBC thresholds

After four years, the general transfer balance cap (TBC) is finally set to be indexed on 1 July to $1.7 million. This means individuals who have already triggered a TBC will have a personal cap between $1.6 million and $1.7 million. Individuals can check their personal details using ATO online services through myGov.

Administration of penalties

Practice Statement Law Administration 2020/3

This document provides guidelines to ATO staff in relation to the administration of penalties for Superannuation Industry (Supervision) Act and Regulations breaches. This includes guidelines for staff on the factors to consider in relation to the remission of fees.

When making a decision, staff are instructed to take into account the background, experience and intentions of trustees/ directors, the seriousness of the breach and whether remission (or not) is likely to lead to a behavioural change to prevent further breaches.

ATO digital improvement program

Monthly and quarterly activity statements are available online. As part of the streamlining and efficiency measures, notification emails are no longer sent to registered agents. Agents will be able to use on-demand reports to check due dates, with access through the practitioner lodgement service or online services for agents.

45-day rule dropped

Exposure draft for the Treasury Laws Amendment (Miscellaneous and Technical Amendments) Regulations 2020

Proposals to require an SMSF to finalise financial statements at least 45 days before lodging the annual return have been dropped from these regulations. The superannuation industry has welcomed this change.

ATO’s new online services for business

The business portal and electronic superannuation audit tool are being phased out over 2021 and will be replaced with the new online services for business tool to manage tax and super obligations. The new service is accessed through myGovID.

SuperStream for rollovers

All rollovers to or from an SMSF now need to use SuperStream. This will require an electronic service address.

COVID rental income deferrals

SPR 2020/2 Self-Managed Superannuation Funds (COVID-19 Rental income deferrals – Inhouse Asset Exclusion) Determination

This determination was published on 27 November 2020 and is now effective. It ensures that an in-house asset is not created where COVID-19 rental concessions were provided to a related party or the SMSF held an interest in a company or unit trust that provided rent concessions.

By Louise Biti Director, Aged Care Steps.

Aged Care Steps (AFSL 486723) specialises in the development of advice strategies to support financial planners, accountants and other service providers in relation to aged care and estate planning. For further information refer to www.agedcaresteps.com.au