Changes to event-based reporting for self-managed superannuation funds (SMSFs)

As part of the superannuation reforms announced in the 2016 Budget, the federal government has introduced measures that will require trustees of self-managed superannuation funds to report events affecting their members’ balances.

This will be handled through a system called event-based reporting.

What is event-based reporting?

Event-based reporting is required for the Australian Taxation Office (ATO) to track an individual’s Transfer Balance Account (TBA) across all of their superannuation interests, including retail, industry, defined benefit and self-managed superannuation funds.

This will also allow the ATO to administer the appropriate actions in the event an individual exceeds their Transfer Balance Cap (TBC).

The TBC limits the amount that an individual can transfer into tax-exempt retirement phase income streams within the superannuation system.

Reporting to the ATO will be conducted through the use of Transfer Balance Account Reporting (TBAR).

Which events must be reported?

There are eight types of events that must be reported to the ATO on the TBAR:

1. The value of superannuation interests supporting retirement phase income streams on 30 June 2017
2. Commencing new retirement phase income streams on or after 1 July 2017
3. The value of reversionary income streams when an individual becomes entitled to them following the death of a member
4. Limited Recourse Borrowing Arrangements (LRBA) commencing from 1 July 2018 are required to report loan repayments where an LRBA is held in retirement phase and being paid down with accumulation phase money
5. Notional earnings accruing to excess transfer balance amounts
6. Commutations of superannuation income streams. E.g. stopping an existing income stream or drawing a lump sum benefit from an existing income stream
7. Structured settlement payments contributed to superannuation
8. Certain payments arising from family law splits, bankruptcy or fraudulent transactions.

Who needs to submit a TBAR and when do they need to submit it?

All superannuation funds with members in receipt of a retirement phase income stream at 30 June 2017 must submit a TBAR form to the ATO by 1 July 2018.

From 1 July 2018 onwards, the allowable time period for reporting events to the ATO is dependent on your Total Superannuation Balance (TSB).

The information below summarises the reporting criteria and deadlines.

• If all members have TSBs under $1 million and there is at least one active retirement phase income stream, the reporting deadline is annually by May 15 (the due date of the annual return)
• If there is at least one member has a TSB over $1 million and there is at least one active retirement phase income stream, the reporting deadline is auarterly, within 28 days of the end of the quarter.

My SMSF is affected, what should I do?

For the upcoming 1 July 2018 deadline, LDB Group can arrange to lodge your TBAR form with the ATO on your behalf before 1 July 2018, based on the information reported in your SMSF’s 2017 financial statements and tax return.

After 1 July 2018, if you fall into the category affected by the quarterly reporting requirement, and any of the above reportable events have occurred, you must arrange for a TBAR form to be prepared and lodged before the deadline of 28 days after the end of that quarter.

This shift to ATO event-based reporting should prompt you to regularly review your SMSF’s transactions and engage with your accountant to meet reporting requirements.

Your SMSF accountant should have software and systems in place to monitor and track these events on your behalf.

Talk to the SMSF experts

Overwhelmed by the requirements and not sure where to get started with your SMSF? Avoid the hassle and leave it to the SMSF experts at LDB Group.

We’ll be happy to assist.

Give us a call on (03) 9875 2900 or fill in the contact form below.