Indications that this was a direction that SMSF trustees may be expected to take arose from the newly established Super New Measures SMSF Consultation Group, which met for the first time earlier this year. This group was established to ensure regular discussion between stakeholders and the sector's regulator.
The ATO advised that due to practical implications for SMSF members there are several events that SMSFs will need to report to the ATO on an events basis for the purpose of the transfer balance cap, including:
- When an SMSF complies with a commutation issued by the Commissioner.
- When there is a full commutation of an SMSF member's entitlement to income stream.
- When there is a partial commutation of an SMSF member's entitlement to an income stream.
- When an SMSF member's entitlement to an income stream arises from a structured settlement.
It is understood that the ATO had proposed to introduce event based reporting for all SMSFs from July 1 2017, but recognised there were practical issues to deal with and that trustees would require sufficient time to transition to a model of more regular events-based reporting.
Under the proposed reporting requirements, some events like a commutation of a pension would be required to be reported within 10 business days after the end of the month in which that commutation occurs. The commencement of pensions would need to be reported within 28 days of the end of the quarter.
The ATO also noted that it is expecting to issue a range of different letters to individual super fund members, including instances where an individual member:
- Has triggered a non-concessional or concessional contribution 'bring forward'.
- Are at risk of exceeding the $1.6 million transfer balance cap.
- ATO data indicates they may have exceeded the $1.6 million transfer balance cap.
- Have made concessional contributions greater than $25,000.
- Have income stream entitlements over $1.5 million.
- Have income stream entitlements between $1 million to $1.5 million.
- Are under age 25 and have an income stream.
- Evidence suggests they are 59 or over and they have a Capped Defined Benefit income stream.
See the SMSF New Measures Consultation Forum key messages here.
Source: This article was first published by Tax & Super Australia at http://www.taxandsupernewsroom.com.au/
More Cleardocs information on related topics
You can read earlier ClearLaw articles on a range of SMSF topics.
Order Cleardocs SMSF packages
- Update an SMSF deed
- Set up an SMSF
- SMSF set up + register corporate trustee
- Set up an SMSF pension
- SMSF pension commutation
- Create an SMSF Investment Strategy
- Arrange SMSF borrowing documents:
- SMSF Death Benefit Nomination — binding or non binding
- SMSF Death Benefit Agreement — binding and permanent
- SMSF Minutes & Resolutions Package