The ATO is reminding SMSFs with a corporate trustee to pay their ASIC Annual Review fee or risk severe ramifications.
With over 65% of the SMSF population having a corporate trustee, there are many issues that an SMSF may run into that could be difficult and costly to resolve if the company’s status becomes deregistered.
Failure to pay the ASIC Annual Review fee could result in ASIC de-registering the company – resulting in an SMSF not having a trustee. Where the corporate trustee of an SMSF is de-registered by ASIC:
- The company ceases to exist as a legal entity and can no longer do anything in its own right. Further, the company’s now former directors will no longer have the right to deal with fund assets,
- SMSF assets (held by the corporate trustee) will vest in the Commonwealth (represented by ASIC),
- Any money held in the fund’s bank account(s) will need to be lodged with ASICs Unclaimed Monies Account, and
- The SMSF will no longer be able to accept employer contributions or any superannuation rollovers.
While it may be possible to subsequently re-instate the corporate trustee, this will be a time consuming and costly exercise process. And, once re-instated will subsequently be followed by the need to claim back any monies that were paid to ASIC.
Handy hint: A common reason for ASIC de-registering a company is due to the directors not receiving their Annual Statement. Reviewing the recorded address and email details will reduce the likelihood of this impacting your client. Any changes to company details can be submitted through ASICs online services.
Note: for a special purpose company the annual review fee is currently $59.
Written by Fabain Bussoletti, Technical Manager, SMSF Association