The ATO has announced that event-based reporting will be limited to SMSFs with members with Total Superannuation Balances of $1 million or more, starting 1 July 2018. This comes after “detailed consultation” with the SMSF sector.
SMSFs included in event-based reporting will be required to report events within 28 days after the end of the quarter in which the event occurs, said ATO Deputy Commissioner James O’Halloran. He also said SMSFs with member Total Super Balances under $1 million can choose to report events when they lodge the SMSF Annual Return.
“As a result of this approach it is estimated that up to 85% of the SMSF population will not be required to undertake any additional reporting outside of current annual reporting time-frames for the foreseeable future.”
“However, it is important to restate that in all cases, regardless of the reporting timeframe that applies, reporting is only required if an event that impacts a member’s transfer balance cap actually occurs – for example, when a SMSF member first starts to receive a pension from their fund.”
The ATO has been consulting on how to implement event-based reporting. O’Halloran said the feedback had highlighted concerns about the effort and costs involved.
“The ATO has listened carefully to this feedback, and in considering these concerns we have decided to provide an annual reporting time-frame for SMSFs with members with lower superannuation balances and to allow a quarterly reporting time-frame for other SMSFs.”
“The ATO believes that the combination of these approaches sensibly balances administrative ease and efficiency with the increased need for transparency across the superannuation system.”
He said the ATO will continue to evaluation the benefits and risks from the new reporting requirements.
Event-based reporting rules get ‘thumbs up’ from SMSFA
The SMSF Association has given the announced rules the ‘thumbs up’, welcoming the reduced burden on SMSF trustees and their advisors.
SMSF Association CEO John Maroney said the organisation was pleased the ATO heeded the industry’s concerns.
“The Association proposed, and the ATO agreed to, a $1 million superannuation balance threshold for individuals, reducing those receiving a pension and having to report by about 85%,” Maroney said.
“We are also pleased that the ATO has simplified TBAR implementation by not progressing with a transition period before more onerous reporting timelines would apply. The simple requirement of ongoing quarterly reporting for relevant SMSFs provides clarity for all SMSFs and their advisors.”