SMSFs may have to start reporting more frequently, including ‘event based reporting’, says the ATO.
James O’Halloran, ATO Deputy Commissioner for superannuation, told the SMSF Association National Conference that the changes legislated in 2016 creates a need for “clearer and timelier understanding of assets and values” in SMSFs.
“The current SMSF business model built around an inherent lag in end of year reporting is going to significantly limit opportunities for clients. Our consultation processes have been discussing potential alternate reporting solutions,” he said.
“I know that there has been concern about any potential requirement for event based reporting. We understand these concerns and the practical issues raised by this issue.”
“However, as an industry, we must give consideration to the fact that there are new situations where an SMSF will need to report an event such as compliance with a commutation authority issued by the Commissioner.”
Another situation where it may be in the “best interests” of SMSF members to report an event soon after it occurs is where they are close to the Transfer Balance Cap, Mr O’Halloran said.
“Having timelier information about their position may prevent them inadvertently exceeding the cap.”
“Together we need to consider how best to support SMSF trustees and professionals to track, understand and where needed report those events that will have a material impact on their compliance with the new measures.”
The ATO has started discussions with the superannuation industry about modifying the SMSF Annual Return to capture more information about balances than has previously been required.
“Now, currently, funds report the total closing balance, however this won’t be adequate for the new measures.”
Mr O’Halloran said these changes are expected for the 2017/18 return.