From 1 July 2018, as a result of the 2017 super reforms, the trustee(s) of a self-managed super fund must lodge with the ATO a Transfer Balance Account Report (TBAR) where a transfer balance account event occurs in respect of a member. The ATO uses this information to record and track a member's transfer balance account and total superannuation balance.

What is reportable?

A member's 'transfer balance account'[1] must be reported in a range of circumstances, including but not limited to the following:

• where a pre-existing super income stream continues to be paid to a member on or after 1 July 2017, and is in retirement phase on or after 1 July 2017; and
• where, after 1 July 2017:
  • a member commences a retirement phase income stream;
  • a member commutes a retirement phase income stream; or
  • a member's pension is commuted to comply with a commutation authority issued by the Commissioner of Taxation.

Although the SMSF trustee is not required to lodge a TBAR until after 1 July 2018, the trustee must ensure that events affecting a member's transfer balance account - which occur between 1 July 2017 and 30 June 2018 - are also reported in the TBAR at the time the SMSF's first TBAR is due.

How to report

To lodge a TBAR, a separate form must be lodged in respect of each member and must be in the form prescribed by the ATO. An online form is available to SMSF trustees on the ATO's website here.

Reporting timeframes

Generally, the deadline by which the TBAR must be lodged depends on the 'total superannuation balance'[2] of a fund's members:

• if all members of the SMSF have a total superannuation balance of less than $1million – the fund must report the event no later than when its annual return is due; or
• if any member has a total superannuation balance of $1million or more – the fund must report the event within 28 days after the end of the quarter in which the event occurs.

If a commutation is effected as the result of:

• a commutation authority - the TBAR must be lodged no later than 60 days after the issue of the commutation authority; or
• an excess transfer balance determination – the TBAR must be lodged within 10 business days after the end of the month in which the commutation occurred.

An SMSF may report events earlier than the above timeframes and the ATO encourages this in order to avoid the issue of an excess transfer balance determination where the member would otherwise be on record as having exceeded their transfer balance cap.

Failing to report within timeframe

Where the SMSF trustee fails to report the transfer balance account event within the required timeframe, a member's transfer balance account may be affected and the member penalised and subject to compliance action.

Cleardocs and TBAR documents

Cleardocs' annual review of its SMSF master documents now includes references to the TBAR reporting requirements in the SMSF Product Disclosure Statement and the SMSF Pension Commutation Product. The latest documents will be released as part of Cleardocs' 2018 EOFY review.

More information from Maddocks

For more information, contact Maddocks on (03) 9258 3555 and ask to speak to a member of the Commercial team.

More Cleardocs information on related topics

You can read earlier ClearLaw articles on a range of topics, such as:

• Housing affordability and super: upcoming changes for first home buyers and 'downsizers'
• Commuting your super – are you ready?
• The reality of ageing SMSF trustees: death of an SMSF trustee
• What does it take to be removed as a SMSF trustee? Views from the NSW Supreme Court
• Corporate Trustee v Individual Trustee: Key Differences for SMSFs

Order related document packages

• SMSF Borrowing (Related Party)
• SMSF Borrowing (Bank)
• Superannuation Trust (SMSF)
• Update to SMSF
• SMSF set up + register Corporate Trustee
• Change SMSF Trustee (Cleardocs deed)
• Change SMSF Trustee (death of a trustee)

[1] The ‘transfer balance account’ is a combined account which records the member’s balances across all super funds which fund or are to fund pensions to a member. The transfer balance is constituted by the total amount of assets which have been transferred into all such super accounts.

[2] The ‘total superannuation balance’ is the combined value of the member’s account balances which are held in accumulation accounts and pension accounts.