NIL SMSF Returns

An SMSF is a type of trust and cannot be dormant like a shelf company. An SMSF should be operative as soon as it’s established. For this reason, Superannuation Warehouse charges a fee of $450 for Individual Trustees or $1,400 for Corporate Trustees when setting up an SMSF. This is regarded as a non-concessional contribution into the Fund. This effectively is the action that brings the SMSF into existence.

If there’s no further activity in the SMSF, say for the first year, a Return Not Necessary needs to be lodged. Please note that the Supervisory Levy is still payable even with a low activity Fund.

Return Not Necessary (RNN)

If an SMSF has had NIL operation during a financial year, an RNN can be lodged noting no operation occurred in that specific financial year. If you are a client of Superannuation Warehouse, we can lodge an RNN for your Fund. For us to lodge an RNN the Fund must first receive a rollover/contribution into the SMSF Bank Account. This can be done once the SMSF Bank Account has been setup and the Fund is listed as ‘Complying’ or ‘Registered’ on Super Fund Lookup. Once the SMSF Bank Account clearly displays its first rollover/contribution, we write to the Tax Office and request an RNN be lodged for that specific Financial Year. For further guidance on transferring benefits into your SMSF so an RNN can be lodged, please see here.

Rules for newly established SMSFs

From 18 July 2022, all newly established SMSFs need to have assets set aside for the Members to legally establish the Fund. In the Fund’s first year of operation and the later income years, there should be at least one Member with a balance greater than zero.

Superannuation Warehouse charges a fee of $450 for Individual Trustees or $1,400 for Corporate Trustees when setting up an SMSF. This is considered a non-concessional contribution to the Fund by the Members. Therefore the Fund now ‘holds an asset’, and an ABN can be applied for. This fee will be expensed in the Income Statement of the SMSF in the first year of operation.

Next Steps

From 1 January 2015, it is an ATO requirement that an SMSF must now be active when establishing the SMSF. Please ensure you commence operation of your SMSF once the Fund has received a ‘Complying’ or ‘Registered’ status on Super Fund Lookup.

Please refer to our Annual Return page to see what we require from you as Trustee in order to lodge a year-end tax return for an SMSF.

FAQs (click on the question to reveal the answer)

Q: Why can’t you lodge a RNN for my SMSF anymore?

A: Previously the ATO allowed SMSF’s to lodge a Return Not Necessary (RNN) if no assets were held in the SMSF.

This exception for first year lodgements has been removed from 1 January 2015. All new SMSFs registered on or after 1 January 2015 must lodge an SMSF annual return.

This change ties in with the introduction of the ABN entitlement tool. RNNs will no longer be granted until the Fund first holds assets.

If however an SMSF was registered before 1 January 2015, it is acknowledged that some Funds may have been set up without assets. On the provision that certain criteria are met, a RNN may be applied for the 2015 financial year only if the SMSF meets all the following conditions:

* was registered in the 2014-15 financial year;

* was not legally established by 30 June 2015;

* had not received contributions or rollover amounts by 30 June 2015; and

* has received contributions by the date of the request for a RNN.

Alternatively you can cancel the ABN for the Fund and setup a new SMSF if any previous SMSF has been left dormant.

Q: Does the SMSF have to pay the ATO supervisory levy in advance?

A: Yes, the levy payable now sits at $259 and is payable in advance. A newly registered SMSF will have to pay the levy twice ($518= $259 + $259) in the first year that the fund was established.

Note: If you register a new SMSF during the 2015/2016 financial year, your SMSF can expect to pay a $518 for the ATO supervisory levy (representing the 2015/2016 and 2016/2017 levy) at annual return lodgement time. If you registered a new SMSF during the 2014/2015 financial year, likewise you can expect to pay $518 for the ATO supervisory levy when lodging the 2014/2015 SMSF return.

For more info on the amounts SMSFs will have to pay under the SMSF supervisory levy, see the ATO information page by following this link.

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Superannuation Warehouse is an accounting firm and do not provide financial advice. All information provided has been prepared without taking into account any of the Trustees’ objectives, financial situation or needs. Because of that, Trustees are advised to consider their own circumstances before engaging our services.