Resigned directors offered relief from ID requirements

Former company directors, including those of corporate SMSF trustees, will not be required to obtain a director identification number (director ID) by 30 November if they have ceased all directorships before 1 December under a new draft legislative instrument released by the ATO.

The draft instrument, ABRS 2022/D1, issued on 15 November will exclude individuals who have resigned from all directorship roles during the period 4 April 2021 to 30 November 2022 from needing to apply for a director ID.

A draft explanatory statement (ES) accompanying the draft legislative instrument stated: “The instruments will relieve particular classes of persons from the obligation to obtain a director ID.

“To ensure that affected classes of persons benefit from this relief and do not become liable to any penalties for not applying for a director ID, the instrument for resigned directors and non-individual directors under the Corporations Act must take effect from 1 December 2022.”

The draft ES also noted the timing of the release of the instrument as being close to the deadline to apply for a director ID and said: “As a consequence of the timing of the registration of this instrument, it is necessary to give the instrument made under the Corporations Act retrospective commencement from 1 December 2022.”

The move has been welcomed by the SMSF Association (SMSFA), which stated it had “strongly advocated for this exclusion” and the removal of former and resigned directors from requirements to apply for a director ID did not undermine the intent of the policy.

The SMSFA noted the draft instrument does not permanently exclude an individual from the director ID regime.

“An individual who resigns before 1 December 2022, but later becomes a director again, will still need to obtain a director ID prior to any appointment as an eligible officer,” it said.

Accurium head of education Mark Ellem also welcomed the change and said: “Whilst a bit late in the game, it’s a welcomed measure to address this particular scenario of resigned directors who have no intention of ever holding office again.”

Smarter SMSF chief executive Aaron Dunn was also supportive of the shift, but noted the negative impact of the previous position on those who had to deal with it.

“It is pleasing to see this ‘common-sense’ approach by the [ATO] registrar to this issue, albeit far too late in the process when many people have fumbled their way through the process now unnecessarily,” Dunn said.

Written by Jason Spits
Source: smsmagazine.com.au