As part of administering the new transfer balance cap measure, the Australian Taxation Office (ATO) is currently developing a new self managed superannuation fund (SMSF) event based reporting regime. This regime is likely to be in the form of a report to be called the Transfer Balance Account Report or TBAR. At this stage, the reporting regime is expected to be as follows:
- Where the event is a pension being commuted (ie stopped) in part or in full or a rollover occurs – that must be reported to the ATO with 10 business days after the end of the month that the event occurs
- Where the event is the commencement of a pension – that must be reported within 28 days of the end of the quarter that the event occurs
- The TBAR will be separate to the SMSF annual return
The ATO is also expected to introduce the following transition period for events that occur in the first part of the 2018 year (ie from 1 July 2017):
- Where the event is the commencement or commutation of a pension, that event does not need to be reported until the SMSF is due to lodge its 2017 tax return (typically May 2018)
- However, all events that occur after that date have to be reported in the normal manner (ie monthly or quarterly)
- The transition period will not apply to some events – such as rollovers
For many practitioners, and SMSF trustees, this will be a fundamental change in how they administer their SMSFs. Where an SMSF trustee will commence, or commute, a pension they can no longer see their tax agent once a year after year end. They will have to see their tax agent before, or soon after, an event occurs. While tax agents may have to prepare “real time” accounts so that they can lodge such reports.
It is unlikely that many, if any, SMSFs will be reporting on a monthly basis. In fact, most SMSFs will have no TBAR reporting obligations because they have no pensions or they are not starting any new pensions or commuting any existing pensions. But for those that are affected by the new regime, they will have to ensure that they have systems and processes in place that will enable them to comply with their reporting obligations.
To discuss this further or for more information please contact: