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There are new reporting obligations for self-managed super funds (SMSFs). This is to support the introduction of the transfer balance cap and event-based reporting framework.

The transfer balance cap is a limit on the amount that individuals can have in pension in their superannuation. The cap is $1.6 million, per individual. For the ATO to monitor and regulate this, you (as trustees) are now required to report to the ATO any event that impacts this cap. This reporting obligation is known as TBAR (transfer balance account reporting).

When does TBAR reporting commence?

From 1 July 2018, SMSFs are required to report events to the ATO that impact on an individual’s Transfer Balance Account (TBA).

What are the reporting obligations?

The method of reporting is via a separate form to your SMSF annual return. Ongoing, the reporting obligation requires you to report each and every event that impacts your transfer balance cap. Depending upon your (or the individual’s superannuation balance), this obligation may be annual or quarterly.

What events are required to be reported to the ATO?

SMSFs will need to report events that affect member’s transfer balance such as:

• Income streams/pensions that are in place on 30 June 2017 that are:
  • continued to be paid on or after 1 July 2017, and
  • are in retirement phase.
• New pension commencements from 1 July 2017
• Principal repayments on limited recourse borrowing arrangements (LRBA) commencing after 1 July 2017, where there are accumulation and pensions in place
• Commutations from Pension Accounts

There are some events that are excluded from reporting including:

• Pension payments
• Earnings and losses of investments
• When an income stream ends as the interest has been exhausted
• The death of a member

How to report the TBAR

Altus will be lodging TBAR’s on behalf of our clients to cover all obligations relating to the year-end 2017. The next obligations on trustees are to report any transfer balance cap events for the year-end 30 June 2018. This report is due to be lodged by 20 October 2018.

From 1 July 2018, if you have a member whose balance exceeds $1 million, you will be required to report these events within 28 days following the end of the quarter of which they occurred.

If no members of the fund have a balance exceeding $1 million this obligation will be an annual obligation.

We are here to help

Please be aware, there are penalties for non-compliance. As your Altus Adviser, we are here to guide you through this complex legislative environment and your SMSF requirements. If you have any questions, please get in touch with your Altus Adviser or our about what these obligations mean to you.