The SMSF Association says that the clock is ticking towards the due date for the first quarterly Transfer Balance Account Report (TBAR), for those SMSFs which have to report quarterly.
“SMSFs on the quarterly schedule will have to report any TBC [Transfer Balance Cap] events for the first quarter of the 2018-19 financial year by 28 October 2018,” warned SMSF Association Head of Policy Jordan George.
“For the typical pension commencement date on 1 July 2018, this will require the commencement of the pension to be reported by the end of October,” he said.
The Transfer Balance Account Report (TBAR) is part of the event-based reporting framework, which is required for the ATO to administer the Transfer Balance Cap.
The ATO says that “from 1 July 2018, all SMSFs must report events that affect their members’ transfer balances. Timeframes for reporting are determined by the total superannuation balances of an SMSF’s members”.
“When all members of an SMSF have a total superannuation balance of less than $1 million, the SMSF can report this information at the same time as when its SAR [SMSF Annual Return] is due.”
But for SMSFs with larger Total Superannuation Balances, the ATO says (with their own emphasis): “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 ATO has more information on event-based reporting for SMSFs on its website.
Jordan George said that its important to remember that once an SMSF is assessed as either quarterly or annual TBAR it remains on that schedule.
“As SMSFs generally align the valuation of their assets with the completion of their end-of-year financial accounts, it’s possible that funds will not know the exact value of their income stream by this date,” he said.
“However, the ATO has stated that SMSFs can use its valuation guidelines, and, if the valuation is consistent with these guidelines, it will accept a ‘reasonable estimate’ of the starting value of a retirement superannuation income stream.”
Update: The ATO has also publicised the upcoming due date, noting that if SMSFs don’t meet their TBAR obligations “your member’s transfer balance account will be adversely affected, your member may be penalised and there may be reverse workflow for you to take care of.”
Though the ATO also says: “Note: If no transfer balance account event occurred, you have nothing to report and different reporting timeframes will apply if your member has exceeded their transfer balance cap.”
The ATO encourages SMSFs that don’t have to report by 28 October to still be aware of the Event-Based Reporting obligations, including what to report, when and how.