The government’s recent announcement that SuperStream would be extended to included SMSF rollovers presents an “important opportunity for all SMSFs”, the Australian Taxation Office (ATO) has said.
In a presentation made to the SMSF Association, acting assistant commissioner Tara McLachlan and assistant commissioner Dana Fleming said the arrival of SuperStream for SMSFs presents a time for all SMSFs to pause and think about their digital capability.
“To date, only rollovers between two APRA funds can be transferred electronically using SuperStream. This reform will allow SMSF members to initiate and receive rollovers electronically,” the assistant commissioners explained.
“The benefits include: reducing compliance costs for SMSF and APRA fund trustees by reducing manual, paper-based processes, processing rollovers from APRA funds to SMSFs within days rather than months [and] improving the integrity of the super system with the mandatory use of the ATO SMSF verification service, which verifies all the SMSF data provided to APRA funds before the rollover can be processed.”
Before jumping in, however, SMSFs will need to consider their capacity to interact digitally and whether they will obtain an electronic service address (ESA).
SMSFs should be able to begin using SuperStream in late 2019.
However, trustees should also keep in mind that running an SMSF is “not about being cavalier or taking a relaxed attitude to the rules”, they added, calling for continued engagement.
“In the hands of engaged and informed trustees who know when to seek professional advice, SMSFs can be a suitable retirement strategy. On the other hand, if a trustee is not engaged and not informed, SMSFs can be a high-risk or expensive option,” the assistant commissioners said.
“The average number of wind-ups per year is approximately 12,000, highlighting that SMSFs are not suitable for everyone.”
They said while deciding to become an SMSF trustee is a “positive step”, it’s not a decision that should be made quickly.
“Super is a dynamic and interconnected industry to work in and even outside periods of major reform it’s important to stay current with developing law, financial practices and administration policy.”