GST Registration for SMSFs

Should your SMSF register for GST? Yes - in most cases it is beneficial to register for GST on an annual voluntary basis to claim RITC.

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Written by Intello Robot
Updated over a week ago

Intello does not charge any additional fees for SMSFs registered for GST.

GST Registration for SMSFs

You must register for GST if your GST turnover is $75,000 or more. GST turnover does not include input-taxed sales, such as financial supplies and renting or selling residential premises. Most SMSFs don't have to register for GST because they mainly make input taxed sales. However, you may choose to register for GST.

Do I need to register my SMSF for GST?

Where an SMSF has GST turnover of above $75,000 it MUST register for GST (for example where it owns a commercial property).  Where an SMSF doesn't own a commercial property, it has the option of registering for GST on a voluntary basis.

Where an SMSF chooses to register on a voluntary basis, we recommend that GST reporting period selected is annual to enable the annual GST return to be lodged when the SMSF Annual Return is lodged.

What can an SMSF claim GST on?

An SMSF can claim GST credits relating to financial supplies it makes.  Expenses relating to financial supplies are called 'reduced credit acquisitions' and an SMSF can claim 75% of the GST incurred.

The following reduced credit acquisitions can commonly be claimed by an SMSF registered for GST:

  • Investment portfolio management fees

  • Fund administration fees

  • Ongoing financial advice fees

  • Brokerage fees on investment transactions (share trades)

There are a number of items where an SMSF cannot claim a reduced GST credit:

  • Audit fees

  • Accounting fees 

  • Taxation services and taxation advice fees

  • Fund establishment costs

  • Legal advice

The above is a very simplified summary of what an SMSF can and cannot claim in regards to GST. Please refer to the section below for more details on exactly what an SMSF may or may not claim. 

It is also important to note the some wrap account providers claim the reduced income tax credits on behalf of the investor and these are credited to the account of the investors throughout the year.

You can also download a fact sheet from Class on this topic here:
https://intello.box.com/v/GSTonAccountingAdminSMSF

Can you claim GST on audit fees for an SMSF?

No. Audit fees for an SMSF are specifically not eligible to claim the GST on. SMSF Audit fees are not a reduced credit acquisition.

Can you claim GST on actuarial certificate fees for an SMSF?

Yes. Actuarial certificate fees are included as reduced credit acquisitions and therefore 75% of the 1/11th GST can be claimed.  Actuarial certificates where required ensure compliance with industry regulatory requirements.

Further Information from the ATO

Self-managed super funds (SMSFs) that are registered for GST and make financial supplies (such as providing an interest in a regulated super fund or buying and selling shares) may be able to claim some or all of the GST credits on purchases related to their financial supplies.

Most SMSFs don't have to register for GST because they mainly make input taxed sales.

Financial supplies and GST credits

Generally you make a financial supply if you do either of the following:

  • provide an interest in a regulated super fund

  • buy and sell shares.

Financial supplies are input taxed. This means you:

  • don't pay GST to us on financial supplies you make

  • generally can't claim GST credits for the GST included in the price you pay for anything you purchase to make those supplies.

While you generally can't claim GST credits on purchases you use to make financial supplies, you may be able to claim them if you don't exceed the financial acquisitions threshold.

If you exceed the financial acquisitions threshold you can still generally claim reduced GST credits if your purchase is a reduced credit acquisition.

Reduced credit acquisitions (RITC) 

A reduced credit acquisition is a specified type of purchase for which a reduced GST credit is allowed, when you use the purchase to make financial supplies. For these purchases you can claim 75% of any GST included in the purchase price.

Common reduced credit acquisitions

Investment portfolio management functions

In this context, the term 'investment portfolio' means the same as 'asset portfolio' and relates to particular classes or sectors within a particular class of investments you own.

GSTR 2004/1 Goods and services tax: Reduced tax acquisitions states that management involves more than just providing advice for you to act on. This means that obtaining financial advice by itself is not a reduced credit acquisition.

Investment management services include, but are not limited to:

  • establishing a financial plan or investment strategy

  • ongoing implementation, execution, or refining of that plan or strategy

  • ongoing implementation or execution of a given investment mandate.

Administrative functions

The following administrative functions are reduced credit acquisitions if they relate to investment funds, including superannuation schemes:

  • maintaining member, employer and trustee records and associated accounting

  • processing applications, contributions, benefits and distributions

  • ensuring compliance with industry regulatory requirements (excluding taxation and auditing services).

A regulatory requirement in this context refers to a Commonwealth, state or territory law. For example, any requirement in the SIS Act is a regulatory requirement for SMSFs.

Trustee records include minutes of trustee meetings, records of all decisions affecting the trust and similar documents.

Associated accounting refers only to those accounting tasks that are associated with maintaining member, employer or trustee records. It includes:

  • posting entries to accounts to record individual member or employer contributions

  • debiting charges to individual member accounts

  • recording payments to members and investors of a managed investment scheme.

***Intello generally classifies fees relating to administration of the SMSF as "Fund Administration Fees" as audit and tax aspects of our service are minor and incidental due to how we administer and process the SMSFs***

Things that are not reduced credit acquisitions

Purchases not mentioned in the complete list in Division 70 of Part 4-2 of the GST law are not reduced credit acquisitions.

Tax and auditing services are specifically excluded.

Tax services that are excluded are services such as:

  • providing tax advice

  • preparing and lodging a tax return, statement or specific requests for information we make

  • representing you in connection with any audit activities we start.

Auditing service is a broad term that refers to any service that systematically looks at accounting records and financial statements to work out whether they give a true and fair view of the business carried on.

The following purchases are also generally not reduced credit acquisitions:

  • accounting services that are not related to maintaining member, employer or trustee records

  • providing advice and preparing financial statements (other than those you must provide under a regulatory requirement)

  • legal services (including legal costs to set up your SMSF).

In very limited circumstances, where these purchases form an ancillary, incidental or integral element of an administrative function under funds management services, they may be treated as reduced credit acquisitions.

The above is an extract from the ATO only. For further details please visit the ATO website:
https://www.ato.gov.au/Business/GST/In-detail/Your-industry/Financial-services-and-insurance/SMSFs---GST-and-financial-supplies/

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