SMSF setup and activation time

How much time it takes to setup SMSF? Is there any difference in SMSF setup time for online service provider like esuperfund vs accounant firm? My colleague has setup with smsfwarehouse and his fund status on SMSF lookup website does not show as registered yet. It says that it may take between 2 and 28 days for ATO audit to be completed. Until that is completed, he cant rollover money to SMSF bank account. Is this normal ? I am wondering if he had used his regular accounant, it would have taken less time or not.

 

I just called a SMSF expert they said 2-48days. The huge gap was due to end of financial year being busy

 

I have been establishing SMSF's very quickly (about 15 mins). The tricky part is getting the ABN straight away (happens in most cases but if delayed can take up to 28 days) and then getting the ATO to register the fund as a complying SMSF (which means it can accept its first rollover/contribution). You also won't be able to open a bank account without a signed deed.

Also if a member/s personal tax is not up to date this will delay things.

 

Thanks.

@milkyjoe ,

So how much time it takes for ATO to register fund as a complying SMSF? Does it make any difference in timeline if you get it done by an accountant vs online providers like smsfwarehouse or esuperfund for this stage of the process i.e. after ABN and TFN are issued ?

 

It varies. If the ABN goes through without a hitch and members are up to date, a few weeks?

I can't speak for SMSFwarehouse as I am an accountant and have only ever setup SMSFs as an accounting firm.

 

We issue advice which takes time however once that is signed off, a SMSF with Trustee can be set up in one business day, an ABN application is made and most of the time will be changed on superfund lookup to "regulated" within 2 business days - for 9 out of 10 cases. The one case is where the client or member has an outstanding tax matter with the ATO could be an outstanding tax debt or tax return which provides a red flag which must be manually resolved. The ABR is a gov't entity and like the rest of the public service they are useless and have been working from home for the last 18 months. You cannot escalate the matter until 28 days is over and at that time you may have an audit done and once resolved it will be changed to Regulated.

Only when you have "Regulated" can you activate a bank account and rollover your super.

Frustrating as some are in a rush and thats usually the one that gets picked up - most go through to the keeper without issue.

To answer your question - Smsfwarehouse are one of the biggest firms around (by funds) and a abn appication is simple and will be no difference with any other accounting firm.

Hope that helps...

Cheers Ivan

 

Thanks @Redwood and @milkyjoe for sharing your experience.

 

Its rare that a ABN is delayed and 99.99% are now issued in real time but smsf regulation is always provisional. Issues concerning individuals and compliance histories can be a trigger but debts is less likely - Arrears of several years or a history of failure to comply with obligations or a issue where a penalty has been imposed or threatened by the ATO is a certain red flag. The ATO also perform a background check that red flags certain crimes or jail terms and also match with ASIC who have a rogues gallery. The ATO are also vigilant for certain person who should not have a SMSF and this includes temporary residents or people not ordinarily resident in Australia as a member of a smsf. ATO are also doing residency based checks with DFAT (and do so each 6 months for all smsfs) vs asic and a foreign person may trigger a registration issue. A rollover from a public fund may pose a concern in such cases. (ie it is a contribution) as well as other concerns. Low super balances eg $150K or less may also be a factor that causes the ATO to delay issues until they make further enquiries. I had one of these this week. One member is intending (large) additional contributions and the ATO were satisfied with that being indicated over the phone.

One of the greatest delays is not following the rollover process to the precise requirements of the existing fund. eg Uncertified copies of ID etc. The existing fund has a 28 day clock and industry funds are notorious for waiting until day 27 and they decline the rollover and then the clock must restart.

ABR is a unit of the ATO and there is a subset team who are smsf specific. The ATO are the SMSF regulator. Personally I think they are wonderful people and contribute to the strong and robust system of Goverment we have. . ATO staff are primarily office based 3+days a week excepting some regions (eg Victorian based). Working from home is not as prevalent as it was. Security is a major concern to the Commissioner and others.