Self managed super funds have new reporting requirements also known as TBAR (transfer balance account reporting). This helps the ATO to track members’ balances in relation to the $1.6m transfer balance cap and their total super balance.
From 1 July 2018 SMSFs must report certain transactions or events relating to pensions in retirement phase.
These events includes:
- existing retirement pensions a member was receiving on 30 June 2017 that continue to be paid to them on or after 1 July 2017
- new pensions commenced
- pensions commuted (taken as a lump sum or converted to an accumulation interest)
- some limited recourse borrowing arrangement payments
- compliance with a commutation authority issued by the Commissioner
- personal injury (structured settlement) contributions
From 1st of July 2018, TBAR applies to SMSFs on a compulsory basis, and at that time SMSF trustees will need to make a one-off disclose of the value of their 30 June 2017 pension balances.
SMSFs will have different reporting timelines for depending on individual member balances within each fund as per the below:
- where all members of the SMSF have a total superannuation balance of less than $1 million, the SMSF can report this information at the same time as when its annual return is due (often 15 May of the following year)
- SMSFs that have any members with a total superannuation balance of $1 million or more must report events affecting members’ transfer balances within 28 days after the end of the quarter in which the event occurs
- The initial transfer balance account events that occur during 2017–2018 should be reported at the same time as the SMSF’s first TBAR.
- Note that the reporting of existing pensions (regardless of size) at 30 June 2017 must be done on or before 1 July 2018.
In the instance where a SMSF member has exceeded their transfer balance cap, they are required to report earlier.
An excess transfer balance cap can result in additional tax and any late lodgement may also incur penalties.
- Pension payments do not need to be reported under TBAR, even if minimum pension amounts are exceeded, but lump sum withdrawals must be reported.
- Reporting requirements (quarterly or annual) are based on members total super balances at 30 June in the previous year.
Author: Brigette Liddelow