Miller Super Solutions founder Tim Miller said he believes transfer balance cap reporting should apply to all SMSFs, rather than having different rules for different funds.
“The government’s agenda was to maintain integrity or have some level of integrity in the system, and I think once you start having different rules for different people then all of a sudden you start to throw that integrity out of the window,” said Mr Miller.
“If you’re going to have a rule for SMSFs, then have a rule for all SMSFs.”
Mr Miller said it’s also unclear why $1 million has been singled out as the threshold amount.
“What makes $1 million the magical number anyway? What about all those clients that have got $1,000,005? Why should they have to report and someone with $6 less than them doesn’t have to,” he said.
“You always start to get into dangerous territory when you bring in low balances and I understand the reference to how far away it is from $1.6 million so there’s no risk of a transfer balance cap excess, but then why not $1.4 million? There’s no logic to it.”
Mr Miller also noted that with the one-year transitional period, and the ATO stating that they plan to take an educational approach for the first 12 months of the new reporting, this effectively means a two-year transitional period for the industry.
“[With a low balance threshold] there’s also additional work that’s going to be involved in working out which clients are below or above and then doing the reporting for some and not others.”
I’m not against lodgement for all funds regardless of balance. I would suggest some leniency on the application on penalties is appropriate where the balance is low and late lodgement wouldn’t result in a loss of revenue to the ATO. Say, if lodged by the due date of the tax return, and the TBC is not breached, then penalties should be waived. Some common sense would be nice. Whatever happened to self assessment?