Questions & Answers - Return Not Necessary (RNN)

Section One: Explaining Return Not Necessary (RNN)?

+ What is Return Not Necessary (RNN)?

If an SMSF does not have assets set aside for the benefit of members in the first year it was registered, a Return Not Necessary (RNN) request needs to be submitted to the Australian Taxation Office (ATO). If the RNN is granted by the ATO, the SMSF is not required to lodge a tax return and the supervisory levy does not need to be paid for the year during which there were no assets or transactions.

In order to apply for the RNN with the ATO, the SMSF needs to provide documentation evidencing the SMSF has been activated (e.g. the SMSF's first bank statement detailing the first deposit).

More information can be found on the ATO website here.

+ Do I need to submit the Online Checklist if there were no assets or transactions in my SMSF?

Yes. You are still required to complete the Annual Online Checklist to confirm that your SMSF had no activities and no compliance issues (e.g. disqualified Trustees). To access the Online Checklist, please click here to visit your client portal.

Section Two: Activate the SMSF

+ How do I activate the SMSF?

You can activate the SMSF in any of the following ways (subject to conditions):

  • Make a cash contribution into the SMSF;
  • Rollover your current super benefits into the SMSF;
  • Make a non-cash contribution into the SMSF.
+ How do I make cash contributions into my SMSF?

You simply need to deposit the funds into your SMSF Bank Account. We caution that you need to comply with the contribution rules and caps which can be found here.

+ How do I rollover my current super benefits to my SMSF?

The rollover process can be found on our website here.

+ Why can’t I make rollovers to my SMSF?

This is because your SMSF’s Australian Business Number (ABN) is withheld by the ATO due to the Initial Audit Process. You will not be able to initiate the rollover process to the SMSF until the Audit is finalised by the ATO. For more information on the ATO’s Initial Audit Process, please click here.

+ Can I make non-cash contributions into my SMSF?

Yes. It is possible for members to make contributions of assets directly into the SMSF instead of cash. However, we caution that only certain assets listed in the super regulations can be transferred in specie by a member. For more information about in-specie contributions, please click here.

Section Three: Cancel the SMSF

+ What happens if I do not activate my SMSF by the end of the current financial year?

In this case, the ATO may cancel the SMSF. If the SMSF is cancelled, you will need to establish a New SMSF if you still wish to manage your Super in the future.

Moreover, ESUPERFUND will no longer be able to act as the Tax Agent for your SMSF or attend to your Fund’s Annual Compliance Requirements.

+ I wish to wind up / cancel my SMSF, what should I do?

Please notify our office of your cancellation request via Inbox here. We will then provide further instructions to wind up your SMSF.

Section Four: Apply for RNN with the ATO

+ What documentation do I need to provide in order to apply for Return Not Necessary (RNN) with the ATO?

You will need to provide the associated bank statement detailing the first transaction date if the first deposit is made to your SMSF’s bank account OR the associated documentation evidencing the transfer of ownership if the first deposit is made in the form of assets instead of cash.

+ Do I need to provide bank statement evidencing the first transaction date if I made the deposit into my SMSF’s bank account established by ESUPERFUND?

Yes. ESUPERFUND only has access to the electronic data of the transaction details of your SMSF’s bank account. However, the ATO requires the official documentation (e.g. Bank Statement in the name of the SMSF) evidencing the date the SMSF first held assets and commenced operating.

+ Do I need to take further actions once the above-mentioned documentary evidence has been provided?

No further action is required by you. Once the documentary evidence is provided, we will send a notice to the ATO confirming that the SMSF is activated in the current Financial Year and does not need to lodge a tax return for the prior Financial Year and then notify you via inbox.

Section Five: Processing the RNN Request

+ What is the ATO’s processing time of the “Return Not Necessary” request?

We advise that it will take up to at least 28 business days for the ATO to process the “Return Not Necessary” request.

+ Will I be informed once the ATO has approved the “Return Not Necessary” request?

Once the request has been approved by the ATO, the lodgement status will be changed to “Lodged” on your ESUPERFUND client portal – “Compliance” on the top navigation menu bar – “Compliance History” page. You will NOT receive a formal notification from the ATO or ESUPERUND.

+ I cannot rollover funds because my Australian Business Number (ABN) was withheld by the ATO, what should I do?

If your Fund’s ABN has been withheld by the ATO because you failed the initial audit process, you can now request a review of the audit result by following the instructions detailed in the original Audit Finalisation Letter. Please contact the ATO directly if you did not receive or misplaced the Audit Finalisation Letter.

+ When do I need to lodge my first Annual Income Tax Return?

Once the SMSF has been activated, it must lodge its annual Income Tax Return every year. The process to prepare the annual compliance documentation for your SMSF can be found on our website here.

Set up your SMSF with ESUPERFUND Today!