The regulator said SMSFs must report certain events that affect members’ transfer balance account (TBA) quarterly using transfer balance account reporting (TBAR). These events must be reported even if the member’s total superannuation balance is less than $1 million.
Trustees must also report and lodge within 28 days after the end of the quarter in which the event occurs. They are not required to lodge if there were no TBA events during the quarter.
The ATO said trustees should always refer to Event-based reporting for SMSFs and the TBAR instructions when preparing their TBAR.
The easiest way to lodge is through Online Services for Business.
If an SMSF does not lodge a TBAR by the required date, the member’s transfer balance account may be affected. The member may need to commute any amounts more than their cap and avoid more excess transfer balance tax.
Furthermore, the regulator has reminded trustees that they must value their fud’s assets each year and provide supporting evidence to their auditor.
It said one of the responsibilities SMSF trustees have every income year is valuing their fund’s assets at market value.
The market value of an asset is the amount that a willing buyer and seller would agree to in an arms-length transaction. These valuations will be used when preparing the fund’s accounts, statements and SMSF annual return (SAR).
The fund’s asset valuations will be reviewed by an approved SMSF auditor as part of the annual audit before lodgment of the SAR. The auditor will check that assets have been valued correctly, and assess and document whether the basis for the valuations is appropriate given the nature of the asset. They are not responsible for valuing fund assets.
The regulator reminded trustees that it is their responsibility to provide objective and supportable evidence to the auditor for the valuation of the fund’s assets, including all relevant documents requested to prevent delays in auditing the fund. Failure to do so could result in a potential late lodgment of the annual return or a contravention if mistakes have been made.
For some asset types, the law requires valuations to be undertaken by a qualified independent valuer. Find out more by visiting SMSF valuation guidelines.
Yes, but the ATO still hasn’t facilitated TBAR lodgements by SMSF administrators, only a rudimentary system for tax agents on their portal And so far not extended to SMSF software providers who must rely on the mail!
If the ATO IT programmers weren’t wasting time on useless systems like tax agent linking or directors IDs, maybe they could get something practical done, that will actually benefit the rest of humanity!