A new reporting regime for Self-Managed Superannuation Funds (SMSFs) commenced on 1 July 2018. It’s crucial that SMSF members understand the impact of this new reporting framework and get it right.
From 1 July 2017, superannuation fund members have been subject to a $1.6 million transfer balance cap (TBC). The TBC is a limit on the total amount of superannuation that can be transferred into the retirement phase, which in turn limits the tax exemption on balances above this amount.
Your transfer balance account (TBA) monitors any transactions that affect your transfer balance cap.
Important from 1 July 2018
From 1 July 2018, SMSFs will need to report:
- The value of member TBAs; and
- Any movements in the TBA
To the Australian Taxation Office (ATO) using the transfer balance account report (TBAR). This reporting process is known as event-based reporting.
Event-based reporting is a significant shift in the SMSF administration process.
When and what do you need to report?
By 1 July 2018
Any pensions that were in existence on or before 30 June 2017.
Any events that affect the value of the TBA from 1 July 2017 need to be reported to the ATO. When this information is reported is determined by the total superannuation balance of the SMSFs members:
|Total superannuation balance||Reporting timeframe|
|All members of the SMSF have a total superannuation balance of less than $1 million
|When the annual return is due for lodgement.|
|The SMSF has any member with a total superannuation balance of $1 million or more||28 days after the end of the quarter in which the event occurs.
Events that impact on your TBA
Any event that affects the value of a member’s TBA need to be reported. For example:
- New retirement phase income streams (pensions)
- Some limited recourse borrowing arrangement payments
- Compliance with a commutation authority issued by the Commissioner if you exceed the TBC
- Commutations of retirement phase income streams (lump-sum payments from a retirement phase pension).
Commencing a new pension once retired or withdrawing a lump sum from your pension to help your children buy a property are examples of reportable events.
Keep us up to date
We will use the live feeds that we have in place for your SMSF to prompt you if we believe that there have been any events that need to be reported. However, we ask that you:
- Keep us up to date if you commence any new pensions or take large sums of money from your fund
- If you have a transition to retirement pension in place and retire from the workforce, please advise us as your pension will now count towards your transfer balance cap
- Continue to provide your information to us in a timely manner so we can ensure that your reporting requirements are met.
Failure to lodge the TBAR on time may lead to the ATO applying penalties to your SMSF.
We look forward to assisting you with this process. Please feel free to give our superannuation team a call if we can clarify anything for you on 03 8393 1000.