ATO updates instructions and guidance for TBAR
The ATO has updated its guidance on transfer balance cap reporting for SMSFs based on what it is seeing in the sector and industry feedback.
In an online update, the ATO said it has updated its guidance to highlight certain obligations SMSFs have in relation to event-based reporting including the need to ensure that the commencement and commutation of a retirement phase income stream is supported by contemporaneous fund records.
The ATO also stressed that SMSFs must ensure that payments to members are correctly characterised, so that auditors can ensure the minimum pension payment standards have been met, especially where pension payments have been made from an income stream that has also been commuted in full or part during the year.
It also advised SMSF trustees that the transfer balance account reporting for the commencement and commutation of the retirement phase income must align with the SMSF’s exempt current pension income (ECPI) claim for the year.
The Tax Office said it has also updated its TBAR instructions to make it clearer that SMSFs need to use a TBAR to report transfer balance cap events and their response to a commutation authority, including that they commuted the income stream set out in the commutation authority sent to the fund.
“Other super providers only need to use a TBAR to report their response to a commutation authority,” it explained.
The ATO has also explained how to use a TBAR form to report an SMSF’s response to a commutation authority and included additional information on how to correct reporting errors and cancel a TBAR.
The instructions have also been updated to clarify that the TBAR form should not be used to report a member’s accumulation phase value to the ATO after the 2017 income year.
“This information should be reported as part of the SMSF’s annual return,” the ATO said.
The instructions now also state that the TBAR form should not be used to report a member’s retirement phase value.
“This information should be reported to us as part of the SMSF's annual return,” it said.
Miranda Brownlee
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.
