Speaking at an industry conference, ATO assistant commissioner Kasey Macfarlane said transfer balance account reporting will be available for SMSFs from 1 October 2017.
While SMSFs generally won’t need to commence events-based reporting until 1 July 2018, said Ms Macfarlane, those that chose to defer their reporting need to be aware of the risks to the individual member, and the trustee will need to accept responsibility to track their position in relation to the transfer balance account.
Ms Macfarlane said it is important to note that while there is a deferral date of 1 July 2018 for the events-based reporting, SMSF trustees will need to fill in all the gaps up until then.
“They need to be able to report to us all of the events that have occurred prior to 1 July 2018. They need to be mindful that that all of those events that happen between 1 July 2017 and 30 June 2018 can’t be wrapped up and bundled up, and netted off,” she explained.
“So if there’s a commencement of an income stream, and then a subsequent commutation, those events have to be reported separately. You can’t just bundle them up and net them off and report them all as one on 1 July 2018.”
If SMSFs choose to defer the reporting they also expose themselves to the risk of inadvertently going over the cap and facing an excess transfer balance cap liability, she warned.
“If they’re not tracking it, they won’t be in a position to know that they may need to take action to commute an amount to get below that cap,” she said.
SMSF practitioners and trustees, she said, should also be mindful that if a member has more than one income stream, the relevant income streams need to be reported separately and the relevant events reported separately as well.
Totally agree. Over compliance at its worst threatening yet more compliance and regulation at unnecessary cost to Trustees already being flooded with too many rules and regulations.
If someone inadvertantly goes over the cap, that is purely lack of planning and has nothing to do with the reporting timeframe. This is not a measure to improve outcomes for clients. It is a measure to collect data for the government. Besides, the number of clients who will be close to the cap is minimal. The rest is just reporting for the sake of reporting. There is no value added for the majority of clients to justify the increased costs.