ATO cuts six-member fund work

The ATO has signalled it will not be preparing for the introduction of six-member SMSFs or the three-year audit cycle after it dropped them from its roadmap for changes within the superannuation sector.

In an update to its website released earlier this month, the regulator stated that in regards to an increase in members from four to six for SMSFs and small Australian Prudential Regulation Authority (APRA) funds, it would “remove this outcome as the legislation has not been reintroduced following the federal election”.

The increase in SMSF members was introduced as part of the 2018 budget, but was removed from legislation in April 2019 to ensure the bill passed through parliament.

The ATO used the same phrasing to describe its work on the SMSF three-year audit cycle, noting it took the action on both matters from 11 November 2019, a year after they were first added to the roadmap.

The updated list of changes being undertaken by the ATO also includes rolling changes to its SuperStream rollover service, and amendments to total superannuation balance (TSB) calculations that will include the value of an outstanding limited recourse borrowing arrangement (LRBA) in an individual’s TSB.

In the area of SuperStream rollovers, the ATO indicated it was currently deploying and testing an SMSF verification service for APRA funds to obtain verified SMSF details prior to making rollovers via SuperStream, as well as an SMSF member verification service that allows funds to match member details to ATO information to assist in rollovers.

The deployment phase, which includes engagement with the superannuation sector, is due to run from November 2019 to December 2020 ahead of the onboarding process in January 2021 and industry compliance with the SuperStream standard by the end of March 2021.

The roadmap also indicated the ATO’s work in relation to TSB calculations related to the value of an outstanding LRBA will move from the build phase to the testing phase with the superannuation sector at the end of February 2020.

The ATO noted the deployment of the TSB calculations had taken place from July 2019 after the amendments enabling the calculations received royal assent in October, but with a retrospective date of effect of 1 July 2018, making the 30 June 2019 TSB the first TSB to be affected by this change.

Source: smsmagazine.com.au