The implications of the superannuation changes announced in the 2016 Federal Budget, which came into effect 1 July 2017, just keep on coming.
Not only are accountants coming to terms with the changes moving forward and the highly technical and complicated Transitional Capital Gains Tax Relief measures, which need to be considered and worked through on any Self Managed Superannuation Fund (SMSF) that was paying a Transition to Retirement Income Stream in the 2017 financial year or which has a member with a Total Superannuation Balance greater than $1.6m and paying a pension, but they need to consider the new reporting mechanism for when certain things occur in their client’s SMSFs.
This events based reporting needs to occur when:
- SMSFs whose members’ total superannuation balances are less than $1 million can choose to report any events that impact their members’ transfer balances annually at the same time that they lodge their SMSF annual return.
- SMSFs with members whose total super balances are $1 million or more on 30 June 2017 will report events impacting members’ transfer balance account within 28 days after the end of the quarter in which the event occurs.
SMSFs will commence event based reporting on 1 July 2018. Meaning that SMSFs will report transfer balance cap events via the ‘Transfer Balance Account Report’ (TBAR) form, with each debit and credit event needing to be reported separately.
There is also another form, known as a Transfer balance event notification form (TBEN) that needs to be reported in certain specific situations also.
The most common events that will need to be reported on either the TBAR or TBEN are:
- A pre 1 July 2017 pension which continues after this date.
- When any new retirement phase pension is commenced
- When lump sum payments are made from a pension account (even if the amounts are retained in the superannuation system as an accumulation phase interest)
- Structured settlement contributions
- Some limited recourse borrowing arrangement loan repayments.
As with most things superannuation, the devil is in the detail. As the following table demonstrates.
Is this just another nail in the coffin of accountants trying to be all things to all people by doing their clients’ SMSFs as an adjunct to their business? I think so. More and more the complexities of the superannuation system means specialist systems, processes and staff to ensure the best outcome for the client.
Frequency of Reporting
* Source Australian Tax Office
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