By the end of July 2018, ATO deputy commissioner James O’Halloran said approximately 135,000 SMSFs had reported transfer balance cap information to the ATO, with the ATO issuing approximately 2,000 excess transfer balance determinations to members of SMSFs.
“We expect that some of these determinations will be amended or revoked as further information is reported to us, for example if a member rectified a small excess under the transitional rules,” said Mr O’Halloran.
“Some individuals will need to act on these determinations and ensure the excess is commuted in full, including cents, by the due date. Trustees will then need to ensure that the commutation is reported to us no later than 10 business days after the end of the month, otherwise we may send a commutation authority to the member’s fund.”
One of the frustrating aspects for professionals dealing with transfer balance cap reporting or excess TBC determinations for clients, he said, has been the difficulty in accessing information about a client’s transfer balance cap.
“We appreciate agents want to be able to see the information we’ve relied on when determining their client has exceeded their TBC,” said Mr O’Halloran.
Tax agents will soon be able to see this information through the ATO’s online services environment, he said, when it moves into public beta testing, which is expected to be later this year.
The online services environment will allow tax agents to view details on bring forward arrangements and transfer balance caps. They will also be able to lodge TBARs for clients.
“They will also [be able to] lodge elections for their clients for concessional, non-concessional and transfer balance caps,” the ATO said.
In the meantime, Mr O’Halloran said SMSF practitioners will have to continue asking clients to access this information through their MyGov account, download the information and email it to them.
SMSF Alliance practice principal David Busoli said relying on the member to provide this information from their MyGov account is “not workable in the real world”.
He also pointed out that it is not just tax agents that need access to the ATO’s transfer balance cap information, with SMSF administrators and financial planners also requiring this information for clients.
“Until TBC information is accessible to all parties involved in servicing the member’s needs, errors will be common,” Mr Busoli warned.
Jane, utmost compliments to you, congratulations and well written, keep up the great work and input with maximum effort, persistence is the resistance!
For those of us who survived the RBL era, this sounds all too familiar. Even in those days, only the personal tax agent of the taxpayer (or the taxpayer) could get details of reported benefits over the phone from the ATO. Financial planners or SMSF administrators had to send in a written request signed by the taxpayer then wait 6 weeks for a written reply; hardly conducive to giving timely advice.
Again, the MyGov solution shows just how insulated the ATO is from the real world. Most clients when asked to go to their MyGov account say “My-what”?, especially the older one’s. Then they spend hours of your or their time trying to set it up and prove they are not a terrorist, then eventually give up because its all too hard!
However, the big issue that again looms is that of timing. SMSFs could have up to 23 months after the fact to report and big funds within 10 working days. Neither solution is feasible or commercial.
Recall when the ATO started handing out extensions to the big funds and institutions who were struggling to report RBLs, some up to 4 years after the fact which blew most of the best laid planning that had already occurred out of the water, and created unforeseen excess benefit determinations and significant angst.
The ATO loves computers so much, why not email the details of a TBC report back to each taxpayer on its acceptance, i.e. something that can easily be forwarded, or even allow a taxpayer to nominate a unique email to receive such an email also. Such an email could be scrapped directly into a planning system.
Maybe like the rest of us, the ATO is pushed around by IT boffins in these design meetings, who rarely see the light of day after dragon slaying all night. ASK the industry what we think. Send a survey or something before you act. You will find that most of us are nice people and only too happy to help!
And I guess Financial Advisers don’t need TBC access ?
Over Bloody Complicated ODwyer and her Treasury buffoons have made such a mess of Super and the over the top complexity, red tape and costly admin is a disaster just starting to unfold.
Had you consulted Industry First ODwyer this wouldn’t have been such a mess.
ODwyer you are a disaster.