Whilst many within the SMSF sector have the occasional and often necessary grumble at the pain points experienced when trying to do rollovers via SuperStream , mandatory for an SMSF since 1 October 2021, recent concessions by the ATO highlight that the Regulator is both willing and able to act when approached directly about impractical elements of our system.
We were recently engaging with one of our SMSF Day 2023 event partners, SuperGuardian, when the issue of ABNs being cancelled as a result of an SMSF being wound up resulting in a SuperStream rollover stalemate was raised. To be eligible to rollover benefits from an SMSF one of the critical requirements is that the fund must have an ABN, a consequence of lodging the final return for a wound up SMSF is that the ATO cancels the ABN almost immediately upon issuing the final notice of assessment.
Previously a 14 day grace period existed between issuing the notice and cancelling the ABN, a timeframe not widely broadcast and as a result often missed, meaning funds were confronted with some untenable options where the members didn’t meet a condition of release. As most will appreciate, when a fund is being wound up, a residual amount is often retained in the bank account to deal with final liabilities and of course alternatively a refund could be due resulting in a credit to the bank account that has to be dealt with following earlier and larger rollovers.
Expanding the timeframe
Having seen funds miss the deadline and having other funds in the process of winding up we saw a great opportunity to have a conversation with the ATO about extending the 14 day window and what was the best course of action for those that have previously passed the time frame. In those discussions the ATO were more than comfortable with extending the 14 day grace period to 28 days. Given that the issuing of the notice of assessment and the deposit of any refund ultimately happen simultaneously, and if not then within a very short period, 28 days is ample time to arrange a rollover given the likelihood that all necessary information about the receiving fund is on record.
Further, in the cases that we dealt with where the fund had been wound up, the ATO were very helpful by reactivating the previously cancelled ABN, this then allowed for the rollover to occur. Of course, going down this path will in most instances take longer than seeing to the rollover within 28 days following the issuing of the final notice of assessment.
In all instances it’s a matter of keeping your eye out for ATO communication, watching the clock and ensuring that you are ready to act as soon as possible once the funds hit the account.