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Director Christine Cameron with local businessman Wayne Daniels.

Christine Cameron with Graham 'Snow' & Christine Kelly.

Our team.

Our Partners - Christine Cameron and Jenny Thompson

Major reporting changes for Self Managed Superannuation Funds

 

Transfer Balance Cap reporting – what does it mean for you?

From 1 July 2017, superannuation fund members are subject to a $1.6 million transfer balance cap (TBC) which limits the tax exemption for assets funding superannuation pensions.

The TBC encompasses a significant amount of monitoring for an individual.  This monitoring is to be facilitated by the Australian Taxation Office's (ATO) event-based reporting framework.

Event-based reporting is a significant shift in SMSF administration processes. Therefore, it is essential SMSF trustees understand the event-based reporting framework.

 

Why events-based reporting?

Event-based reporting is required for the ATO to track an individual's transfer balance account across all of a member's superannuation funds, including public offer and defined benefit funds.  This new reporting regime also allows the ATO to administer the appropriate consequences if an individual exceeds their transfer balance cap.

An SMSF is only required to report to the ATO if any one of its members has an event that impacts their transfer balance account, such as the events listed below.

From 1 July 2018, timeframes for reporting are determined by the total superannuation balances of the SMSF's members:

·         where all members of the SMSF have a total superannuation balance of less than $1 million, the SMSF can report this information at the same time as when the annual return is due.

·         SMSFs that have any member with a total superannuation balance of $1 million or more must report events affecting members' transfer balances within 28 days after the end of the quarter in which the reportable event occurs.  

 

What needs to be reported?

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

·         Income streams a member was receiving on 30 June 2017 that continued to be paid to them on or after 1 July 2017 and which are in retirement phase.

·         New retirement phase income streams.

·         Some limited recourse borrowing arrangement payments.

·         Compliance with a commutation authority issued by the Commissioner.

·         Commutations of retirement phase income streams.

 

All SMSFs that were paying a retirement phase income stream at 30 June 2017 need to complete and lodge a TBAR (Transfer Balance Account Report) on or before 1 July 2018 to report the balance of each pension individually, for each member as at 30 June 2017.

An SMSF is required to report earlier if a member has exceeded their transfer balance cap, regardless of whether the SMSF usually reports annually or not.

 

How can we help?

Maxwell & Cameron Pty Ltd will be reporting all necessary events to the ATO by 1 July 2018 for your fund as required.

We do however require your help with this on an ongoing basis.  If you are intending to perhaps:

·         make contributions to your fund (and intend to commence a pension from these contributions)

·         commence a new income stream (pension)

·         convert a transition to retirement income stream not in retirement phase to a pension in retirement phase

·         draw more than your minimum pension withdrawal

·         any of the various other reporting events,

please make sure you let us know so that we can ensure these events are reported to the Australian Taxation Office within the required timeframes.

If we are unaware reportable events have occurred, or will occur, we will not be able to report the event to the ATO within the required time frame and this may result in a detrimental effect to your fund.

While the onus of necessity is on you to keep us informed of developments within your fund, we will be providing a reminder on a quarterly basis to help you ensure we are kept up to date with developments within your fund which may need to be reported to the ATO.

 

Roll-over to an APRA fund

If you are going to roll over a super benefit into an APRA-regulate fund and start an income stream you are encouraged to report the communication as soon as it occurs. As APRA-regulated funds have a monthly reporting regime, waiting to report the roll-over can result in a double-counting of the member's income streams.

 

If you are concerned your SMSF will be affected by the new pension reporting requirements, please feel free to give us a call to arrange a time to meet so that we can discuss your particular requirements in more detail.

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