SMSF event-based reporting and excess transfer balance determinations
The ATO has confirmed that only events that affect an individual member's transfer balance need to be reported.
The introduction of the SMSF event-based reporting regime for the 2018 income year has required the release of guidance from the ATO as to when SMSFs are required to report and the nature of events which are to be reported.
The ATO has confirmed that only events that affect an individual member's transfer balance need to be reported. Common events to be reported include:
- Income streams a member was receiving just before 1 July 2017 which continued to be paid to them on or after 1 July 2017 and that are in the retirement phase; in the retirement phase;
- New retirement phase income streams; and
- Commutations of retirement phase income streams.
Whether an SMSF is required to report will depend on the value of the member's total individual superannuation balances. SMSFs with members whose balances are less than $1 million are not required to report within the short timeframe and can choose to report events which impact their members' transfer balances at the same time that the SMSF lodges its SMSF annual return.
On the other hand, SMSFs with members with balances above $1 million will be required to report events impacting members' transfer balances within 28 days after the end of the quarter in which the event occurs. Certain events are required to be reported sooner.
Starting in January 2018, the ATO will send Excess Transfer Balance (ETB) Determinations to individuals who have exceeded their transfer balance cap and not rectified the excess. Where a SMSF member receives an ETB Determination from the ATO:
- If the SMSF trustee has not already reported information to the ATO for the member, they must do so as soon as possible;
- The sooner the member removes the amount set out in the ETB Determination out of retirement phase, the less excess transfer balance tax they will pay;
- The member must commute the amount set out in the ETB Determination from retirement phase.
As always with SMSF matters, it's best to speak to your accountant about tax issues if you're unclear about your obligations around reporting. Please call the team on 02 9957 4033 to talk to your accountant team.
This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.