SMSF supervisory levy increase
All superannuation funds are subject to a supervisory levy. This charge covers the costs incurred by the Australian Taxation Office (ATO) when regulating superannuation legislation and ensuring compliance with superannuation rules.
Self-managed Super Funds (SMSFs), being compliance-based, are subject to a similar cost – referred to as the SMSF supervisory levy. This levy is imposed on all SMSFs to cover the ATO’s costs of regulating the SMSF sector, along with ensuring SMSF trustees comply with legislated regulation governing such issues as:
- members’ rights and benefits,
- contributions,
- benefit payments,
- fund investments.
As the number of SMSFs continues to grow, so the cost of regulation and compliance rises, resulting in the ATO announcing a series of changes to the levy over the past number of years.
This latest amendment will impact all SMSFs from 1 July 2013 reducing the supervisory levy from $200 (the 30 June 2012 amount) to $191, then increasing it to $259 in the 2014 financial year. But it comes with an interesting twist: the levy will move from being paid in arrears to being paid in advance.
The way this will work is that SMSF trustees will need to make a “catch-up” payment for the two financial years ending 30 June 2013 and 30 June 2014.
The payments will look like this:
Financial year ending |
Amount payable |
Explanation |
30 June 2013 |
$321.00 |
SMSF levy of $191 plus 50% of SMSF supervisory levy for 2013 – 2014 ($130 i.e. 50% rounded up). |
30 June 2014 |
$388.00 |
SMSF levy $259 plus 50% of SMSF supervisory levy for 2013 – 2014 ($129 i.e. 50% rounded down). |
30 June 2015 |
$259.00 |
SMSF supervisory levy going forward. |
The payment arrangements vary slightly if the SMSF is newly registered or about to wind up. For example:
Financial year ending |
Newly registered SMSF |
Winding up SMSF |
2013 |
$191 + $130 = $321.00 |
$191.00 |
2014 |
$259 + $259 = $518.00 |
$129.00 |
2015 |
$259 + $259 = $518.00 |
Nil |
The ATO has provided a Fact Sheet (http://ato.gov.au/Super/Self-managed-super-funds/In-detail/Reporting-and-record-keeping/SMSF-supervisory-levy/) with examples of how the levy will be applied. Alternatively, contact us if you need more information.
Sources:
www.comlaw.gov.au SMSF supervisory levy imposition amendment regulation 2013 (No.1)
www.ato.gov.au SMSF supervisory levy (Last modified 1 July 2013)
www.ato.gov.au SMSF supervisory levy – 2013 to 2016 financial years (Last modified 28 June 2013)