The ATO has recently updated obligations for SMSFs for the lodgement of transfer balance account event-based reporting for all SMSFs.

From 1 July 2023 the ATO are:

• are removing the total super balance threshold
• require all SMSFs to report 28 days after the end of the quarter in which the event occurred.

From 1 July 2023, all SMSFs must report transfer balance account events 28 days after the end of the quarter which the event occurred (28 Jan, 28 April, 28 July, 28 October).

The obligation to report earlier will remain for

• a commutation of an income stream in response to an excess transfer balance determination (10 business days after the end of the month in which the commutation occurred)
• a response to a commutation authority must be reported by the legislated due date, as specified on the notice.

Please note funds/trustees may choose to report transfer balance account events more frequently. This allows individuals to better manage their transfer balance cap and avoid excess transfer balance tax. For example, this would be beneficial when the member rolls over their interest from an SMSF to an APRA fund.

What are the practical implications of this?

You will no longer be able to back-date the start of a pension to the start of the financial year after 30 September each year. You will be restricted to commencing a pension as at the 1^st day of the current quarter.  For accountants and advisors they may will need to meet and advise their clients in the 1^st quarter of each financial year in order to maximise the potential exempt pension income.

Consequences of late reporting

The ATO has advised they will be initially taking an educative and supportive approach when TBARs are lodged late.  In the future the ATO advised the SMSF may be subject to compliance action and penalties.  The ATO did state they do not intend to deny a fund’s ECPI claims when the fund reports late.