Transfer balance account report now available

A transfer balance account report (TBAR) has been developed by the ATO to capture the new information super providers need to provide.

The new TBAR and relevant instructions are now available from the ATO website. It adds that it is planned to have an online TBAR form available from next January, although you can download a “paper” form here.

Super providers, including SMSFs and life insurance companies, lodge a TBAR to report events relating to an individual’s transfer balance account. Events to be reported in the TBAR include:

  • super income streams in existence just before July 1, 2017
  • any of the following events that occur on or after July 1, 2017
    • superannuation income streams that have commenced in retirement phase
    • limited recourse borrowing arrangement payments
    • member commutations
    • compliance with a commutation authority issued by the Commissioner
    • personal injury (structured settlement) contributions
    • super income streams that stop being in retirement phase.

SMSFs can use the TBAR to report events that affect an individual member’s transfer balance account. While SMSFs have been granted a concession by the ATO, and will not be required to report anything until July 1, 2018, the option will be available from 1 October 2017. (See below for more on the SMSF concession.)

“Reporting on events that affect a member’s transfer balance account is vital to minimising the taxation consequences if the transfer balance cap is exceeded,” the ATO says. “SMSFs with relatively straightforward affairs are likely to have only a few events per member to report over the life of the fund.”

The ATO contends that the most common events that require reporting would be:

  • the values of any retirement phase income streams to which an SMSF member is entitled, including reversionary income streams
  • the value of any commutation of a retirement phase income stream by an SMSF member
  • structured settlement payments an SMSF member receives and contributes to their fund
  • certain limited recourse borrowing repayments that give rise to a transfer balance credit as a result of recently enacted legislation.

Events that do not need to be reported include:

  • pension payments
  • investment earnings and losses
  • when an income stream is closed because the interest has been exhausted.

SMSF reporting concession
The ATO is using a transitional approach to help SMSFs to move to an events-based reporting framework. As a transitional concession, SMSFs will generally not need to commence reporting using the TBAR until July 1, 2018. The ATO is currently consulting with industry on the model of event based reporting to apply from July 1, 2018.

TBAR lodgment should be available from October 2, 2017, and submitted forms will be accepted from that time onwards if the choice is made to lodge earlier.

Although SMSFs will not generally need to commence TBAR reporting until July 2018, the ATO has made it clear that SMSFs will need to ensure they have appropriately documented income stream valuations and decisions for the 2017-18 year. “Until reporting begins, SMSF members must monitor the value of retirement income streams they receive to ensure they will not be in excess of the transfer balance cap from 1 July 2017 onwards,” it says.

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