Directors of a corporate SMSF trustee will only be required to apply for their mandatory director identification (ID) number once regardless of when this company protocol is actually used.
Under amendments made to the Corporations Act, company directors, including individuals holding office in an SMSF corporate trustee, must acquire a director ID number.
The rules came into play on 1 November 2021 and stipulate existing company directors must apply for an ID number before 1 December 2022, individuals appointed to a directorship between 1 November 2021 and 4 April 2022 need to apply for an ID number within 28 days of their appointment, with people intending to be directors having to apply for an ID number before being appointed from 5 April 2022.
The legislation covers enduring powers of attorney and applications for director IDs can be made prospectively. However, under the act, the ID can be cancelled if not used or made active within 12 months of receipt, which has led to concern as to whether multiple applications will be needed in some cases.
In a recent discussion with the SMSF Association, the ATO confirmed individuals will not need to request a director ID number more than once.
When asked by SMSF Association technical manager Mary Simmons whether eligible individuals will be able to simply reinstate their cancelled director IDs, ATO SMSF industrial liaison, policy and governance senior director Martin Frauenfelder answered in the affirmative.
“[It will be] relatively easy. To reactivate a director ID the person just needs to follow the same process as when they applied for the first time,” Frauenfelder noted.
Simmons acknowledged how valuable this detail of the legislation is for SMSFs.
“For the SMSF sector it’s particularly important when you’ve got alternate or successor trustees in place to deal with the death or incapacity of a trustee,” she noted.
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