SMSF non-compliance with release authorities

The ATO has seen a rise in non-compliance among self-managed super funds (SMSFs) when responding to release authorities.

Release authorities are documents issued by the ATO to super funds, authorizing the release of money from a member’s super account to pay specific liabilities.

These include:

• Excess concessional contributions
• Excess non-concessional contributions
• Division 293 tax assessments.

The ATO is seeing a rise in SMSFs that receive a release authority and are either; not responding within 10 business days as required or responding incorrectly. This involves both releasing the requested amount and submitting a release authority statement back to the ATO.

Failure to meet these obligations may result in significant penalties for the fund.

If you’re an SMSF trustee, make sure you have effective processes in place to respond to release authorities promptly and accurately. Supporting your members in meeting their tax obligations is a shared responsibility – and timely action helps avoid negative consequences.

Tips for trustees to stay compliant:

• Check your fund’s mail regularly – release authorities are sent via secure channels, so timely access is essential.
• Set up alerts or reminders – use calendar tools or SMSF software to track key deadlines.
• Work closely with your administrator or tax agent – they can help interpret the release authority and manage the response process.
• Keep your funds’ contact details up to date with the ATO – this includes keeping your Electronic Service Address (ESA) up to date, this ensures you receive important correspondence without delay and can action release authorities faster.
• Understand your obligations – familiarize yourself with the ATO’s guidance on release authorities and ensure your fund’s processes are adequate.

If you have any questions, feel free to ask them in the comment section. We will be happy to answer all your queries.