With continual changes happening in the SMSF world, it is hard to keep up sometimes, but one change that is going to make a significant difference to how an SMSF is run, is event-based reporting, commonly known as the Transfer Balance Account Report (TBAR).
The TBAR will enable the ATO to record and track an individual’s balance for both their transfer balance cap and total superannuation balance. As of July 1, SMSFs will either need to report quarterly or annually, timeframes for reporting are determined by the total superannuation balance as at July 1, 2017.
SMSFs that have any members with a total superannuation balance of $1 million or more must report events affecting transfer balances within 28 days after the end of the quarter in which the event occurs.
Where 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 their annual return is due.
It is more important than ever to start processing SMSFs in real time. Some of the fund events we will need to report are:
Details of income streams (including value and type) being received on June 30, 2017 that continued to be paid to them on or after July 1, 2017 and were in retirement phase on or after July 1, 2017.
Details of new retirement phase and death benefit income streams (including value and type). Where a death benefit income stream is reversionary, the start date will be the date on which the member died.
Details of some limited recourse borrowing arrangement payments (including the value and date of each relevant payment).
Compliance with a commutation authority issued by the Commissioner.
Details (including value) of personal injury (structured settlement) contributions.
Details (including value) of commutations of retirement phase income streams that occur on or after July 1, 2017.