Tag: SMSF

Director Identification Number (Director ID / DIN)

What is a Director Identification Number (DIN)?

The Director Identification Number (director ID) is a unique identifier that a director will apply for once but will stay with a director for life, offering greater identity security. You will need a director identification number if you’re a director of a company or a corporate trustee of a self-managed super fund (SMSF), registered Australian body, registered foreign company or Aboriginal and Torres Strait Islander corporation. The objective is to prevent the use of false and fraudulent director identities.

How and when to apply for DIN?

Directors will be able to apply for a Director ID from November 2021 on the new Australian Business Registry Services (ABRS) online at https://www.abrs.gov.au/director-identification-number/apply-director-identification-number and log in using the myGovID app to complete the application process. Furthermore, they will need to provide proof of identity documentation to verify their identity. A director can choose to provide their tax file number when applying for a DIN, which should expedite the application.

myGovID is not the same as myGov. If you have provided identity information to set up a myGov account, you will have to do it again for a myGovId app.

Directors will need to apply for their director ID by themselves to verify their identity. No one can apply for it on their behalf. There is no fee to apply.

When will directors need to apply?

It is being phased in. When you need to have a director ID will depend on when you were appointed as a director. The table below illustrates this.

How director ID works?

A director ID is a 15-digit identifier given to a director (or someone who intends to become a director) who has verified their identity with ABRS.

Directors will only ever have one director ID. They’ll keep it forever even if they – change companies, stop being a director, change their name, move interstate or overseas.

Why you need a director ID?

All directors are required by law to verify their identity with ABRS before receiving a director ID. This is important because it will help to:

  • prevent the use of false or fraudulent director identities
  • make it easier for external administrators and regulators to trace directors’ relationships with companies over time
  • identify and eliminate director involvement in unlawful activity, such as illegal phoenix activity.

ATO cracking down on super schemes

The tax office is in the process of reviewing a number of cases where it appears taxpayers are inappropriately using their superannuation funds to minimise or avoid paying tax.

Late last week, the ATO issued a taxpayer alert indicating it is reviewing arrangements where individuals divert their personal services income to an SMSF to minimise or avoid tax.

The arrangements under review are typically used by SMSF members at or approaching retirement age as income received by the SMSF trustee is concessionally taxed or treated as exempt current pension income of an SMSF in pension phase.

“In other words, the SMSF member purportedly avoids paying tax on their income at the marginal tax rate,” said deputy commissioner James O’Halloran.

“Under these arrangements an individual performs services for a client for which the individual does not directly receive adequate remuneration for the service provided. Instead the client refers remuneration for the service to a company, trust or other non-individual entity. The entity then distributes the income to an SMSF, of which the individual is a member, as a return on investment,” Mr O’Halloran said.

The ATO are currently undertaking reviews of a number of cases involving arrangements of this type and  will be engaging with taxpayers whose affairs concern them over the coming months.

Property firm hit for false super claims

The director of Consumer Affairs Victoria has accepted an enforceable undertaking from a property investment company that made false claims related to investing in a superannuation fund.

Earlier this month, Consumer Affairs announced that it had accepted an enforceable undertaking from Melbourne-based Accrue Property.

Consumer Affairs found that Accrue made several false or misleading statements on its website.

One of these claims was that the company could show investors how to use their super funds to “earn an outstanding return, regardless of market conditions or whether capital growth occurs”.

It also claimed the Accrue Landbanking system could turn an investor’s super fund into a “goldmine – to purchase an appreciating asset, without taking a cent out of your own pocket”.

Accrue must now advise current or prospective customers that “no return is ever guaranteed” in relation to investing in property and investing through an

The company has also agreed to remove all false or misleading claims from its website and to submit to a two-year compliance program to ensure all company statements comply with Australian Consumer Law.

Accrue has also agreed to pay $5,000 to the Victorian Consumer Law Fund.

Comment: $5,000 ? They would have made more than that one single property deal. If it has been a financial planning firm they would have been hung out to dry