The ATO has sought feedback on streamlining transfer balance cap event-based reporting (EBR) for all SMSFs. Submissions closed on 14 January 2022.
The Tax Institute called on the ATO to delay any changes to the transfer balance account reporting (TBAR) system until 1 July 2023, arguing that changes should not impose an excessive compliance burden on SMSF trustees. The Tax Institute also considers that a safe harbour for reporting TBAR amounts should exist based on a best estimate reporting of amounts.
This article outlines, at a high level, existing EBR requirements, the changes the ATO is considering and what effect the changes can have on SMSF trustees.Alisha Shamim, Maddocks Lawyers
The EBR framework for SMSFs commenced on 1 July 2018. It enables the ATO to administer the transfer balance cap.
Under the EBR framework, an SMSF must report certain events to the ATO by specific due dates. An SMSF trustee generally needs to start reporting to the ATO when the SMSF?s first member commences a retirement phase income stream.
SMSF trustees must submit a TBAR with the ATO for each SMSF member. The form of a TBAR is available on the ATO's website.
SMSFs must report events that affect a member's transfer balance accounts.
There are certain events that an SMSF does not need to report on under the EBR framework - these include pension payments, investment earnings and losses and the death of a member.
From 1 July 2018, all SMSFs must report events that affect their members' transfer balances. If no event occurs, there is nothing to report.
SMSFs that have any members with a total superannuation balance of $1 million or more on 30 June the year before the first member starts their first retirement phase income stream must report events affecting members' transfer balances within 28 days after the end of the quarter in which the event occurs.
When all members of an SMSF have a total superannuation balance of less than $1 million, the SMSF can report this information at the same time as when its SMSF annual return is due (that is, annually).
Notwithstanding the above:
For more information, contact Maddocks on (03) 9258 3555 and ask to speak to a member of the Revenue Practice Group.
Based on feedback received, the ATO is now considering streamlining the transfer balance cap EBR requirements for SMSFs. The changes are intended to (among other things) simplify the EBR system for SMSF trustees and may change the manner and frequency of reporting by SMSFs.
In its consultation paper the ATO posed these questions:
The Tax Institute responded to the ATO's consultation paper and in doing so made the following submissions for the ATO to consider (among others):
The EBR framework is complex and highly regulated. We recommend that you seek independent professional advice to ensure that your SMSF is complying with the requirements. It is also important to monitor any changes to the requirements to ensure that your SMSF remains compliant and is able to benefit from any streamlining efficiencies.
For further guidance on the current EBR framework or your obligations, you may:
You can read earlier ClearLaw Articles on a range of topics, including the following topics which you may find useful:
Paul is a Senior Associate in the Maddocks Commercial team with particular expertise in commercial agreements for the supply of goods and/or services, the Personal Property Securities Act 2009, the National Consumer Credit Protection Act 2009 and the National Credit Code and the Australian Consumer Law.
Paul's key areas of practice include:
Before joining Maddocks, Paul was employed for 13 years with the Victorian Department of Justice, principally as a Deputy Registrar in the Victorian Magistrate's Court, but also as a legislation, policy and project officer for the Department.
The legal information and commentary on this site is general only. Documents ordered through Cleardocs affect the user's legal rights and liabilities. To assess their suitability for the user, legal accounting and financial advice must be obtained.
For more information, contact Maddocks on (03) 9258 3555 and ask to speak to a member of their team.