The regulator stated that there are different timeframes that apply to lodging a TBAR depending on whether the fund is reporting a transfer balance account event, a commutation a member makes after they have exceeded their transfer balance cap and has been sent an excess transfer balance determination, or responding to a commutation authority.
It stated that all SMSFs are required to lodge their TBAR quarterly and trustees must report all transfer balance account events 28 days after the end of the quarter in which the event occurred.
A fund may need to lodge a TBAR sooner where a member has exceeded their personal transfer balance cap. These events must be reported irrespective of the member’s total superannuation balance.
Prior to 1 July 2023 SMSFs, depending on the members’ total superannuation balance, had the option to lodge annually. This is no longer the case. All SMSFs are required to lodge their TBAR quarterly, no matter what their members’ total superannuation balance is. This assists members in making decisions around their transfer balance account.
These time frames do not apply if a member has exceeded their transfer balance cap.
The tax office said if a member has exceeded their transfer balance cap, the trustee must report a voluntary member commutation of an income stream in response to an excess transfer balance determination within 10 business days after the end of the month in which the commutation occurs.
They must correct their reporting or report missing information to the ATO as soon as possible when a member has exceeded their cap and the tax office has issued them with an excess transfer balance determination or their fund with a commutation authority.
If the trustee believes the information the ATO has relied on is incorrect or incomplete, they should contact the office as soon as possible. This can happen if a trustee has not reported an event such as a commutation.
If responding to a commutation authority issued by the ATO, the trustee must lodge the report within 60 days of the date of issue on the commutation authority.
Failure to comply with the commutation authority by the due date, within 60 days of the issue date on the commutation authority, or to tell the ATO why they have not done so (using a TBAR), will result in the member’s income stream to stop being in the retirement phase. This will affect their entitlement to exempt current pension income and may also result in the trustee being liable for penalties or subject to compliance action.
A failure to lodge the report by the required date may result in the member’s transfer balance account being adversely affected, as well as the trustee being subject to compliance action and penalties.
