Does an SMSF need an ABN? The short answer is Yes. And a TFN. A corporate trustee as a special purpose company only needs an ACN . And an individual trustee and member needs a TFN. That’s the whole story in a snapshot.
Does my SMSF need an ABN
But that was quite fast. Let’s go through this again a bit slower and then once more.
Does my SMSF need an ABN?
The answer is yes. And you are justified to think that this is odd, since most SMSFs don’t run a business. Everybody else can only apply for an ABN if they run a business.
But SMSFs live in their own little world with different rules and so the answer is Yes. Your SMSF needs an ABN. And a TFN while you are at it.
Does my corporate trustee need an ABN?
The answer is No if your corporate trustee is a special purpose company.
Special purpose company means your corporate trustee isn’t doing anything else but being a corporate trustee to your SMSF. In that case all your corporate trustee needs is an ACN (Australian Company Number) and a company constitution that can just be a usual set of standards (‘Replaceable Rules’).
However, if your corporate trustee is not a special purpose company, meaning the company is doing something else apart from being a trustee to your SMSF, then your corporate trustee might need a TFN and ABN. So a company can’t hide behind its role as a corporate trustee and run a business on the side.
That’s the short answer. But let’s look at this in a different way. Let’s look at who does what and hence needs what number.
Number
An ABN (Australian Business Number) is an id code for a business and issued by the Australian Business Register – ABR.
An ACN (Australian Company Number) is an id code for a company and issued by the Australia Securities & Investments Commission – ASIC.
And a TFN (Tax File Number) is an id code for a tax payer and issued by the Australian Tax Office – ATO.
Corporate Trustee
A corporate trustee is a company so they need an ACN by definition. Every company automatically gets an ACN upon registration. You are not an Australian registered company if you don’t have an ACN.
If a corporate trustee does nothing else but being a trustee (special purpose company), they don’t run a business. So they don’t need an ABN.
And a corporate trustee (special purpose company) doesn’t need to lodge a tax return or pay tax – the SMSF does – so the corporate trustee doesn’t need a TFN either.
So all a corporate trustee needs and gets is an ACN.
Individual Trustee
An individual trustee obviously doesn’t get an ACN.
The individual trustee doesn’t require an ABN as long as they don’t also run a business.
But they need a TFN as a member. The ATO needs to know who is the ultimate beneficiary of the income earned in an SMSF and they do that through a TFN.
SMSF
A SMSF is a trust and not a company, so they don’t need or get an ACN. Only companies get an ACN.
For some strange reason, the SMSF needs an ABN whether it runs a business or not. Why this is has passed us so far. It just is.
The SMSF needs to lodge a tax return and pay tax. And this obviously wouldn’t work without a TFN. So the SMSF needs a TFN.
So to summarise:
SMSF = TFN + ABN
Corporate Trustee (special purpose company) = ACN
Individual Trustee (not running a business) = TFN
MORE
Class SMSF Benchmark Report June 2018
Disclaimer: Tax Talks does not provide financial or tax advice. All information on Tax Talks is of a general nature only and might no longer be up to date or correct. You should seek professional accredited tax and financial advice when considering whether the information is suitable to your or your client’s circumstances.
Last Updated on 18 January 2019
