SMSF tax returns are due on February 28 if you are lodging your SMSF annual return yourself. Your SMSF return is due on October 31 for your first SMSF year and if you missed to lodge your return for the previous financial year.
You may have a different due date if your SMSF is lodged through a tax agent but the first year’s due is February 28.
If your SMSF is reviewed by the ATO at its registration, your first SMSF tax return due date is October 31 regardless of whether it’s lodged through a tax agent or not.
What happens if you fail to lodge your SMSF annual return on time?
Lodging your SMSF tax return on time is a legal responsibility that if not fulfilled will result in repercussions including penalties and loss of tax concessions.
The Australian Taxation Office (ATO) may require trustees to undertake education, issue failure to lodge on time penalties, remove an SMSF from Super Fund Lookup (SFLU), declare the SMSF non-compliant and remove tax concessions, freeze the fund’s assets or even imprison the trustee.
The education courses designed to improve your SMSF competency are free and available online. If you failed to comply within the nominated timeframe, the ATO will require an administrative penalty.
For SMSF with one or more years of overdue lodgement, the ATO may fine a minimum penalty of AUD$1,050 to a maximum of AUD$12,600, depending on the seriousness of the breach.
Removal from Super Fund Lookup (SFLU)
SMSF that are not on SFLU will not receive super guarantee payments and benefits from super funds and employers as directed by the ATO.
Loss of Tax Concessions
If you fail to lodge your SMSF tax returns on time, the ATO may declare your SMSF as non-compliant in order to remove your tax concessions. A complying SMSF pays tax at a concessional rate of 15%.
Further, a non-compliant SMSF is taxed at the highest marginal tax rate for every year it remains non-complying. Also, in the year it becomes non-compliant, an SMSF’s assessable income should include an amount of the fund’s total assets in its market value.
Freezing of SMSF’s Assets
If the ATO believes the benefits of an SMSF are in danger of being eroded, the ATO will issue to its trustee or investment manager a notice to freeze the assets and not to acquire or dispose of assets.
Before lodging your SMSF tax return, you must have appointed an SMSF auditor not later than 45 days before the deadline of SMSF annual return. An audit is required even if there were no contributions and payments made in the financial year.
Get an Expert SMSF Advice
Unlike individual annual tax returns, SMSF tax returns can be more difficult and complicated. SMSF regulations are complex and can be very daunting. So, if there’s something that you aren’t sure of, it’s best to get the advice of an expert. An SMSF specialist can help take the pain of SMSF tax returns.
Have you lodged your SMSF tax return yet? Do you have tax compliance issues with your SMSF? Get in touch with us today!
Need SMSF advice? Contact a Chan & Naylor accounting specialist here. We have SMSF specialists and advisors ready to make SMSF advantageous for you.
Aside from SMSF assistance, have a look at our other accounting and advisory services designed to help you achieve greater financial success.
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