The ATO has decided to afford a new and significant carve out for the SMSF sector, in relation to a new requirement for super funds to report events that impact a member’s transfer balance account on a real-time basis.
SMSFs with a total superannuation account balance of less than $1 million – about 85 per cent of SMSFs – will not be required to undertake any additional reporting outside of current annual reporting obligations, ifa sister title SMSF Adviser has reported.
From 1 July 2018, SMSFs that have members with total superannuation account balances of $1 million or more will be required to report events impacting members’ transfer balances within 28 days after the end of the quarter in which the event occurs.
The carve-out puts SMSFs in an advantageous position compared to APRA-regulated funds, which are required to report relevant triggers 10 business days after the end of the month they occur.
“It’s worth noting that APRA funds are in a different situation to SMSFs,” ATO assistant commissioner Kasey Macfarlane told SMSF Adviser. “For example, they are operating in a much more automated environment.”
The SMSF Association issued a statement welcoming the ATO decision and claiming its lobbying efforts played a role. However, it is understood that SMSF software providers were most aggressively campaigning publicly and privately for an outcome in line with the SMSF sector’s capabilities.
“[SMSFA] welcomes the news that the ATO has followed several of its suggestions to reduce the compliance burden of transfer balance cap (TBC) event reporting on [SMSF] trustees and their [advisers],” the statement said.
Apart from the death of a member or a member transferring funds from pension mode to accumulation mode or (vice versa) and investment values changing, what are the events that need to be reported.
I think Personal Injury Payments contributed to super have to be reported. As well as LRBA repayments.