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 has been completed, 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 at left/right/pageXX).
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 us 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. There is also a webinar recording titled “Transfer balance cap Commissioner’s commutation authorities” (which can be found on tv.ato.gov.au, or there’s a direct linked at https://bit.ly/2Nkra4V).
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 authority||Not applicable, as the reporting obligation is set by legislation||Within 60 days of the date the commutation was issued|
|Any other TBA event||When 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 event||When 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|
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.