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SMSF SuperStream rollover exclusions

The ATO has updated their SuperStream implementation and on-boarding information document1 to advise of scenarios where a rollover in or out of an SMSF will not be required to be transacted via SuperStream. These include:

  1. The transfer of superannuation benefits between a member’s super account with one superannuation fund and their spouse’s account in another super fund under a family law superannuation split.
  2. The transfer of superannuation from an overseas superannuation fund.
  3. The transfer of superannuation benefits from the member’s super account in Fund A to their spouse’s account in Fund B as a consequence of an application for contribution splitting.

The above scenarios are in addition to the exclusion from the SuperStream system of an in-specie rollover of a member’s superannuation benefits to or from an SMSF. However, it’s important to note that generally a rollover of a member’s superannuation benefits that is affected by a transfer of assets (in-specie transfer) will include a cash component. Whilst the portion of the member’s benefits that are transferred via an in-specie rollover can be implemented outside of SuperStream, the cash portion of the member’s benefits transferred would need to be transacted via SuperStream.

Example:
Carrie and Samantha are longtime friends and are the sole members of the Big SMSF. Whilst they’ve enjoyed investment success, their respective views on investments have changed such that they each now have very different investment strategies in mind. Rather than implement dual investment strategies within their fund, Samantha has decided to leave and rollover her benefits to her new SMSF, the Myown SMSF.

Samantha’s total benefits in the Big SMSF are calculated as $675,550. It’s been mutually decided to affect the rollover of Samantha’s benefits from the Big SMSF to the Myown SMSF as follows:

Transfer of listed shares$285,620
Transfer of listed unit trusts$146,490
Transfer of managed funds$168,355
Transfer of cash$75,085
 Total $675,550

The transfer of Samantha’s benefits to the Myown SMSF will consist of two rollovers:

The in-specie rollover of $600,465 of her benefits via transfer of assets. This will be executed outside of SuperStream; and
The cash rollover of $75,085 of her benefits. This is required to be executed via SuperStream.
The Big SMSF will also be required to provide Samantha with a statement for each transfer of benefits within 30 days of the rollover payment. The SMSF can use the paper Rollover Benefits Statement ATO form (NAT 70944-03.2013) or a similar form that includes the same information.

Electronic Service Address (ESA)

An SMSF will require a rollover enabled ESA when either receiving a rollover of member benefits or rolling out member’s benefits, where the rollover is required to be executed via SuperStream. The ATO’s SuperStream implementation and onboarding information document has also been updated to address the question of whether an SMSF that has an existing ESA, which is not SuperStream rollover capable, needs to be upgraded to a SuperStream rollover capable ESA.

The ATO’s document notes that there is no requirement for an SMSF to have an ESA that offers SuperStream rollover services where the SMSF does not need to undertake a rollover. That is, you only need a rollover enabled ESA when the SMSF needs to either roll out member benefits to another superannuation fund, or receive a rollover of a member’s benefits and the rollover is required to be executed via SuperStream.

Where an SMSF does upgrade to a SuperStream rollover enabled ESA, generally this will mean the SMSF will actually change its ESA. As an SMSF can only have one ESA at any time, if the SMSF is also receiving contributions via SuperStream, the SMSF’s members will need to advise their respective employer of the change of ESA for the SMSF.

SMSF trustees can check if their SMSF SuperStream message provider’s ESA is rollover enable via the ATO’s “Register of SMSF messaging providers”. Simply go to the ATO website (ato.gov.au) and search using Quick Code (QC) 47550.

1. ATO website QC 64130 “SuperStream Rollover v3 implementation and onboarding information (added 3 February 2022).
Disclaimer
The information in this document is provided by Accurium Pty Limited ABN 13 009 492 219 (Accurium). It is factual information only and is not intended to be financial product advice, tax advice or legal advice and should not be relied upon as such. The information is general in nature and may omit detail that could be significant to your particular circumstances. While all care has been taken to ensure the information is correct at the time of publishing, superannuation and tax legislation can change from time to time and Accurium is not liable for any loss arising from reliance on this information, including reliance on information that is no longer current. Tax is only one consideration when making a financial decision. We recommend that you seek appropriate professional advice before making any financial decisions.