Home' Charter : 0911 Charter Sept Contents 58 Charter I September 2011
Technical focus > Superannuation
At this time of year, many practitioners will be
well under way in preparing annual returns
for their self-managed superannuation fund
(SMSF) clients. The Australian Taxation Offce
(ATO) has identifed a number of common
errors that trustees and tax agents make in
preparing SMSF annual returns. It is worth
having a look at where mistakes are being
made and what to do if you lodge a return
with an error.
The SMSF annual return is divided into a
number of sections – the ATO has identifed
errors occurring in the following sections.
Section A: Fund inFormAtion
Question 6: Fund Auditor
Auditor details are commonly reported in
the annual return inaccurately or are out of
date. As SMSF audits must be undertaken
prior to lodgement of the annual return,
there should be no ambiguity at the time
of lodgement about who the auditor is or
their details. Such details are provided by
the auditor as per the ATO-approved audit
report. Frequently, software programs will
carry forward auditor details from prior
years. Particular attention needs to be
paid to this section to ensure that details
carried forward are still current or updated
Question 8: Status of SmSF
Some SMSFs have been inappropriately
reported as defned beneft (DB) funds.
Only SMSFs that were paying a defned
beneft pension before 12 May 2004 are
still able to do so and may therefore be
described as a DB fund. Most SMSFs are
Question 9: Was the fund wound up
during the year?
If the fund was not wound up during the
year, answer no and move to the next
section. Further information in question 9 is
A rundown on the common errors the ATO has identified
in SMSF annual returns.
Story Liz Westover CA
only required where the fund was wound up
during the fnancial year.
Section B: income And
Section c: deductionS
Amounts of income and expenditure must be
reported at their appropriate label. Amounts
should not be grouped together where a
more appropriate label is available. Auditor
fees should be disclosed separately and not
included in management/administration fees
nor should amounts be lumped in as ‘other
Section F: memBer inFormAtion
And Section G: SuPPLementArY
It is important to report all members who
have been a member of the SMSF at any
time during the year (not just members at
the end of the fnancial year). Furthermore,
reporting is required regardless of whether
contributions were received for a member or
not. Where a member has provided their TFN
to the fund, this should be reported also.
Section H: ASSetS And LiABiLitieS
Categories of investments must be reported
at their appropriate label. ‘Other investment’
label should only be used where no other
appropriate label exists. The ATO have
advised that limited recourse borrowing
arrangements (LRBA) should be reported at
Label J Derivatives and Instalment Warrants.
LRBA assets will only be reported at the label
for the underlying asset upon discharge of
the LRBA. Finally, nil assets should only be
reported when the fund has been wound up.
Section J: reGuLAtorY
This section asks a series of yes/no
questions on in-house and related-party
assets as well as other regulatory questions.
It is important to read and ensure the
questions are answered correctly, particularly
if any answers have been automatically
generated by a software program.
mAde A miStAKe?
Trustees and tax agents are able to
lodge amended SMSF annual returns.
However, the returns must be re-lodged
in their entirety, ensuring that Section A,
question 5 is answered Yes, to indicate that it
is an amended return. Tax agents are able to
lodge amended returns through the tax agent
portal. Otherwise, a paper copy of the return
must be used and lodged with the ATO.
However, if an error has occurred that only
relates to Section J: Regulatory Information,
the correct information may be provided to
the Commissioner in writing.
need more HeLP?
Copies of the 2011 SMSF annual return
are available on the ATO website as well as
comprehensive instructions for completing
the return ato.gov.au
The instructions provide guidance for
trustees and tax agents in completing each
section of the annual return and highlights
important information together with some
tips and traps.
It is important also to bear in mind that
different lodgement dates may apply to
SMSFs. Generally, the following lodgement
dates apply for 2011 annual returns:
> 31 October, 2011 – SMSFs with
outstanding prior year returns (unless a
deferral is in place)
> 28 February 2012 – new SMSF registrants
and self preparers
> 15 May, 2012 – other SMSFs using a tax
agent for lodgement.
On occasion, the date may differ for
individual SMSFs. It is therefore advisable
to check the lodgement date for each
SMSF to ensure that late lodgement does
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