The ATO sent out a reminder in March for tax agents, trustees and administrators to check the balances of SMSFs ahead of the transfer balance account report (TBAR) deadline.
According to SMSF Alliance principal David Busoli, a member’s existing transfer balance account is unaffected by a drop in market valuations, so the member’s current pension balance is no guide to their available cap.
But in an email update to members, he said trustees should check their transfer balance account, saying he has “no doubt” that a significant amount of the transfer balance account information held by the ATO is wrong.
“I am convinced of this due to the plethora of incorrect breach notices that were issued at the time the TBA regime commenced,” Mr Busoli said.
“The majority of these were due to errors in processing and reporting, so were subsequently fixed, but only those errors that created a TBC breach were identified.
“Errors that did not cause a breach were not discovered and lie in wait to cause a breach notice at the commencement of a future new pension. Rectification is time-consuming.”
A member’s transfer balance account information can only be obtained by the member accessing their myGov account or on application by their personal tax agent.
Mr Busoli said this does not encourage either efficiency or proactivity.
Instead, he proposed a minimum requirement that members be able to grant authority to third parties, such as SMSF administrators and financial planners, to access TBA data.
“Even better would be the availability of data feeds to SMSF administration software,” Mr Busoli said.
“Unfortunately, the ATO did not devote any priority to this prior to COVD-19 and has certainly been too busy to focus on it since. Until they do, we will just have to muddle on as best we can within a faulty system.”
I am old enough to remember the RBL reporting – that was a dogs breakfast and the TBC will be no different