Self-managed super funds (SMSFs) have new event-based reporting obligations from 1 July 2018 due to the transfer balance cap measures and event-based reporting framework.
Event-based reporting takes place via a Transfer Balance Account Report (TBAR) form, which is separate to an annual SMSF return. A TBAR allows the Australian Taxation Office (ATO) to record and track a member’s $1.6 million transfer balance cap and their total superannuation balance.
Reporting is only a requirement if an event affects a member’s transfer balance cap. Therefore, SMSFs with no members in receipt of a retirement phase pension will not have anything to report until one of the members starts a relevant pension.
Frequency of SMSF event-based reporting
Where all members of the SMSF have a total superannuation balance of less than $1 million, the SMSF can report the transfer balance account events at the same time as the annual income tax return is due.
For SMSFs that have any member with a total super balance of $ 1 million or more (regardless of whether that member is receiving a pension) they must report the 2018 events for all pension members, along with the events for the September 2018 quarter on the TBAR which is due for lodgement with the ATO by 28 October 2018. In future, these SMSFs will then need to record each subsequent quarter’s events within 28 days after the end of the quarter in which the event occurs. For example, if a pension commences on 17 November 2018, it will need to be reported on the December 2018 quarter TBAR which is due for lodgement on 28 January 2019.
Events which must be reported
An SMSF is required to report if one of its members has an event affecting the member’s transfer balance, including:
- Details of income streams being received on 30 June 2017 that:
- Continued to be paid to them on or after 1 July 2017, and
- Were in retirement phase on or after 1 July 2017.
2. Any of the following events that occur on or after 1 July 2017:
- A new retirement phase pension commenced (including death benefit pensions and transition to retirement pensions converted to retirement phase),
- Member commutations from a pension account, even when the commuted amounts are rolled back into accumulation phase and retained in the super system,
- Personal injury (structured settlement) contributions, or
- Certain limited recourse borrowing arrangement payments.
Events excluded from reporting
The following events do not need to be reported on the TBAR:
- Pension payments,
- Investment earnings or losses,
- When assets supporting an income stream are exhausted,
- The death of a member,
- Information that individuals report to the ATO directly using a Transfer Balance Event notification form. This is generally when the following events occur:
- Family law payment split
- A debit event from fraud, dishonesty, or bankruptcy
- Structured settlement contributions made before 1 July 2007.
What if I haven’t yet received a statement from my managed fund?
If an SMSF does not lodge a TBAR by the required date, the member’s transfer balance account may be adversely affected and the member may be penalised. If you are required to lodge a TBAR by the 28 October 2018 deadline but haven’t yet received the required information from your managed fund provider, we are still able to lodge your report to avoid any consequences of late reporting. Once you have received the required information we will then amend the TBAR to reflect the correct details.
Further help
Hall Browns will be in contact with our SMSF clients to let you know if you are required to comply with the quarterly reporting framework. If you do need to report quarterly, we will let you know what information we’ll require from you to in order to prepare the TBAR.
If you have any questions regarding the above information, or to review your superannuation/SMSF strategy, please contact Hall Browns on (07) 3831 1055 or by emailing us at [email protected].
DISCLAIMER: The information on this website and the links provided are for general information only and should not be taken as constituting professional advice from Hall Browns Accountants. You should consider seeking the appropriate legal, financial, or taxation advice to check how the website information relates to your unique circumstances.