Self-managed super funds (SMSFs) have new reporting obligations. This is due to the new transfer balance cap measure and event-based reporting framework.
The transfer balance account report (TBAR) that is used to report certain events is a separate form from the SMSF annual return (SAR). The TBAR enables the ATO to record and track an individual’s balance for both their transfer balance cap and total superannuation balance.
SMSFs will generally not need to start event-based reporting for the transfer balance cap using the TBAR until 1 July 2018. However, an SMSF needs to ensure that it has appropriately documented all income stream valuations and decisions for the 2017–18 year.
There is no ‘special circumstances’ discretion for contraventions of the transfer balance cap and it will be particularly important for all SMSF trustees and members to self-monitor.
An SMSF must report events that affect a member’s transfer balance, including:
- details of income streams (including value and type) 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
- details of new retirement phase and death benefit income streams (including value and type). Where a death benefit income stream is reversionary, the start date will be the date on which the member died
- details of some limited recourse borrowing arrangement payments (including the value and date of each relevant payment)
- compliance with a commutation authority issued by the Commissioner
- details (including value) of personal injury (structured settlement) contributions
- details (including value) of commutations of retirement phase income streams that occur on or after 1 July 2017.
Events that an SMSF does not need to report include:
- any pension payments made on or after 1 July 2017
- investment earnings and losses that occurred on or after 1 July 2017
- when an income stream ceases because the interest has been exhausted
- the death of a member
- information that individuals report to the ATO directly using a Transfer balance event notification form (NAT 74919). Typically, this is when the following events occur
– family law payment split
– debit event from fraud, dishonesty, or bankruptcy
– structured settlement contributions made before 1 July 2007.
- information other funds will report to the ATO, such as a member’s interest in an APRA fund
Working out your reporting due date
The following table will help you work out your reporting due date for the 2017–18 financial year:
Once the reporting framework is set, SMSF trustees will not be expected to move between annual and quarterly reporting due dates, regardless of fluctuations in any of its members’ balances.
Consequences of late reporting
If an SMSF does not lodge a TBAR by the required date, the member’s transfer balance account will be adversely affected and the member may be penalised.
Our focus leading up to and after 1 July 2018 is to support you to prepare for reporting on the transfer balance cap, and help you understand how to report these events.
We will work with you to help with the transition, as well as focusing on compliance measures.