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SMSF event-based reporting: What needs to be reported, what doesn’t

Since event-based reporting started for SMSFs from 1 July 2018, the ATO says that for the larger part, SMSF trustees have mostly adjusted to the new requirements.

Now that an entire income year under the transfer balance account report (TBAR) regime is complete, some teething problems have emerged. A big one for the ATO has been the high number of commutation authorities that have been unnecessarily issued. The ATO says more than 50% of these were revoked due to it consequently receiving amended reporting.

EVENTS THAT NEED TO BE REPORTED

Every SMSF must now report certain events in the ATO’s event-based reporting framework by the due dates (see table).

An SMSF must report events that affect a member’s transfer balance, including:

  • details of pre-existing income streams (including value  and type) being received on 30 June 2017 that
    • continued to be paid to them on or after 1 July 2017
    • were in retirement phase on or after 1 July 2017
  • details of new retirement phase and death benefit income streams including value and type (when a death benefit income stream is reversionary, the start date will be the date on which the member died)
  • details of LRBA payments (including the value and date of each relevant payment) if the LRBA was entered into on or after 1 July 2017 (or a pre-existing LRBA was re-financed on or after 1 July 2017) and the payment results in an increase in the value of the member’s interest that supports their retirement phase income stream
  • compliance with a commutation authority issued by ATO
  • details (including value) of personal injury (structured settlement) contributions
  • details (including value) of commutations of retirement phase income streams that occur on or after 1 July 2017.

If no event occurs, there is nothing to report.

SOME EXCLUSIONS FROM REPORTING

Events that an SMSF does not need to report include:

  • any pension payments made on or after 1 July 2017
  • investment earnings and losses that occurred on or after 1 July 2017
  • when an income stream ceases because the interest has been exhausted
  • the death of a member
  • information that individuals report to the ATO directly using a Transfer balance event notification form (ask TNR if you need this). Typically, this is when the following events occur
    • family law payment split
    • debit event from fraud, dishonesty, or bankruptcy
    • structured settlement contributions made before 1 July 2007
  • information other funds will report to the ATO, such as a member’s interest in an APRA fund.

The ATO has provided guidance in the form of a webinar recording which can be found on its website tv.ato.gov.au. The webinar recording is titled “Transfer balance cap: online TBAR lodgments for agents” and it is also available to view at this link — https://bit.ly/2ZpW1DS.

Once the reporting framework is set, SMSF trustees will not be expected to move between annual and quarterly reporting due dates, regardless of fluctuations in any of its members’ balances or members leaving or joining the SMSF. See table below.

DUE DATES FOR REPORTING TBA EVENTS

Transfer balance account
(TBA) event
Amount of SMSF members’ total
superannuation balance (TSB)
TBAR due date
A voluntary member
commutes an income stream in response to an excess transfer balance determination
Not applicable, as member has exceeded
their transfer balance cap
Within 10 business days after the end of the month in which the commutation occurs
A response to a commutation authorityNot applicable, as the reporting obligation is
set by legislation
Within 60 days of the date the
commutation was issued
Any other TBA eventWhen the first member started a retirement
phase income stream during a year, and all
members of the SMSF had a TSB of less
than $1 million as at 30 June immediately
before they started their income stream
No later than the due date for
lodging the SMSF’s annual
return for the financial year in
which the event occurs
Any other TBA eventWhen the first member started a retirement
phase income stream during a year and
the SMSF had any member with a TSB of
$1 million or more as at 30 June immediately before they started their income stream
28 days after the end of the
quarter in which the event
occurred. For 2018-19 TBA events, this will be 28 October 2019

Please contact TNR if you have any queries from above information or if you have other queries regarding SMSF event-based reporting.

Important: The information contained in this post / article is not advice. Readers should not act solely on the basis of material contained in this post. Items herein are general comments only and do not constitute or convey advice per se. We recommend that our formal advice be sought before acting on anything contained in this post.