Cancelling SMSF registrations

Cancelling SMSF registrations

Cancelling SMSF registrations

The ATO is contacting trustees of newly registered SMSFs that have not lodged an annual return and where they have no records of them holding assets.

The ATO is advising tax practitioners that, if their clients receive a letter, the practitioner should advise them that the ATO will cancel their registrations if they have not taken action as stated in the letter, lodged an annual return or applied for a return not necessary (RNN).

If they apply for an RNN, the request must confirm that, although they are registered, they:

• Have no assets and did not receive contributions or rollovers in their first financial year;
• Have included documentary evidence (such as a bank statement) of the date they first held assets and commenced operating; and
• Will be lodging future returns.

Ref: ATO website 26 April 2016

Capital allowances: effective life reviews
Editor: The ATO has advised that it will be reviewing the effective lives of the following assets.

The ATO welcomes participation in the review process (which is entirely voluntary).

The ATO is starting (or continuing) a review of the assets used in the following industries with a view to making new effective life determinations.

The purpose of the reviews is to ensure the ATO’s effective life determinations cover all assets commonly used by these industries, and reflect current industry practices and expectations.

The ATO’s determinations provide taxpayers with ‘safe harbour lives’ (but they still have the option to self-assess effective lives).

Refer generally to TR 2015/2: Effective life of depreciating assets (applicable from 1 July 2015).

Effective life review of assets used in the data storage services (data centre) industry
The review of assets used in the data storage services (data centre) industry (as businesses defined with ANZSIC code 59220) will cover assets that relate to data centres.

Effective life review of assets used in the mining support services industry
It is anticipated the review of assets used in the mining support services industry (ANZSIC code 10900) will cover all major segments of the industry.

Effective life review of assets used in the cheese and other dairy product manufacturing industry
The ATO will continue its review of the assets used in the cheese and other dairy product manufacturing industry (ANZSIC code 11330), and it is anticipated the review will cover the major segments of the industry, including:

• Butter manufacturing;
• Cheese manufacturing;
• Infants’ milk-based formula and food manufacturing;
• Milk powder manufacturing;
• Whey or whey powder manufacturing; and
• Yoghurt manufacturing.

Other segments of the industries may or may not be reviewed.

How the ATO will conduct the reviews
As part of these reviews, the ATO will:

• Identify the assets currently used in the relevant industry;
• Consult with major interest groups, such as industry representative bodies, users and suppliers (including using interviews and site asset inspections);
• Complete a report with recommendations for new effective lives based on an analysis of the factors listed in the effective life taxation ruling; and
• Remove redundant items currently in the effective life schedule.

The ATO expects to complete the review of these assets within 12 months, with new effective life determinations applying from 1 July 2017.

Draft effective lives will be issued for public comment well before final decisions are made.

For more information about reviews they have already completed, refer to Capital allowances: completed effective life reviews on the ATO’s website.

Ref: ATO website – Business, Depreciation and capital expenses and allowances, In detail, Effective life, Reviews in progress.