ATO warns on dangers of delaying events-based reporting
While events-based reporting has been delayed until 1 July 2018 for SMSFs, the ATO has warned SMSFs that they will need to report any events occurring in the lead up to 1 July separately.
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.
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 has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.