On 16 August 2017, the ATO released for consultation a Draft Legislative Instrument – Reporting of event based transfer balance account information in accordance with the Taxation Administration Act 1953 (Draft SPR 2017/D2). It sets out the way in which superannuation providers (including SMSFs and life insurance companies) are required to report transactions to enable the ATO to determine if an individual has exceeded their $1.6m pension transfer balance cap.
The principal purpose of the Instrument is to set out the timeframe under which the Transfer Balance Account Report (TBAR) is to be provided to report transaction data relating to members of superannuation funds and life insurance companies.
The TBAR is required to be lodged, no later than 10 business days after the end of the month in which the relevant reporting event occurred, or such later date as the Commissioner may allow. While the Instrument establishes the due date for lodgment of the TBAR, the date can be deferred by the exercise of the Commissioner discretion under s 388-55 of Sch 1 to the TAA. Penalties may be applied for failure to lodge on time in the approved form.
SMSFs
Following industry consultation, the ATO said it intends to provide some administrative concessions for self-managed super funds (SMSFs) to support their transition to event-based transfer balance cap reporting which will be announced and communicated separately. [Thomson Reuters note: A practitioner article by Peter Burgess of SuperConcepts sets out aspects of the likely ATO transitional approach to event-based reporting for SMSFs during 2017-18: see 2017 WTB 32 [1108].
Reporting events
Superannuation funds and life insurance companies are required to report the following items that result in a credit or debit in an individual’s transfer balance account:
- superannuation income streams in existence just before 1 July 2017;
- superannuation income streams that commence or begin to be in the retirement phase on or after 1 July 2017;
- commutations;
- compliance with a commutation authority issued by the Commissioner;
- certain limited recourse borrowing arrangement (LRBA) payments;
- personal injury (structured settlement) contributions;
- superannuation income streams that stop being in the retirement phase; and
- any other relevant transactions.
Date of effect
The instrument will commence on the day after it is registered, and will apply from 1 October 2017.