Self-managed super funds (SMSFs) have new reporting obligations. This is due to the introduction of the new
transfer balance cap and total superannuation balance measures.
What is The Transfer Balance Account Report (TBAR)
The Transfer Balance Account Report (TBAR) is a separate reporting form to the SMSF Annual Return. The
TBAR enables the ATO to record and track an individual’s balance for both their transfer balance cap and total
superannuation balance. SMSFs will generally not need to start event-based reporting for the transfer balance
cap using the TBAR until 1 July 2018. However, an SMSF needs to ensure that it has appropriately documented
all income stream valuations and decisions for the 2017-18 financial year
The ATO has advised there will be no ‘special circumstances’ discretion for contraventions of the transfer balance
cap and it will be particularly important for all SMSF trustees and members to self-monitor.
What you need to report
The ATO have advised that an SMSF must report events that affect a member’s transfer balance cap, including:
– income streams a member was receiving on 30 June 2017 that:
– were continued to be paid to them on or after 1 July 2017, and
– are deemed to be in retirement phase.
– any new retirement phase income streams;
– personal injury (structured settlement) contributions;
– compliance with a commutation authority issued by the ATO Commissioner;
– some limited recourse borrowing arrangement payments;
– commutations of retirement phase income streams.
What you don’t need to report
Events that do not need to be reported to the ATO include:
– pension payments made to a member;
– investment earnings and losses for the members accounts;
– the death of a member;
– when an income stream ceases because the interest has been exhausted;
– information that individuals report to the ATO directly using a ‘transfer balance event notification’ form.
Typically, this is when the following events occur:
– family law payment split;
– debit event from fraud, dishonesty, or bankruptcy;
– structured settlement contributions made before 1 July 2007.
How often and when you need to report
If an SMSF member has a pre-existing income stream, it must be reported to the ATO via the TBAR on or before
1 July 2018. A pre-existing income stream is an income stream the member was receiving on 30 June 2017 that
continued to be paid to them on or after 1 July 2017, and is in ‘retirement phase’.
From 1 July 2018, all SMSFs must report events that affect their members’ transfer balance cap. Timeframes for
reporting to the ATO are determined by the total superannuation balances of the SMSF’s members:
– where all members of the SMSF have a total superannuation balance of less than $1 million, the SMSF can
report this information at the same time as when its annual return is due, or
– SMSFs that have any members with a total superannuation balance of $1 million or more must report events
affecting members’ transfer balances within 28 days after the end of the quarter in which the event occurs.
Transfer balance cap events that occur during the 2017-18 financial year should be reported at the same time as
the SMSF’s first TBAR is due:
– if the SMSF is reporting annually, this will be the same time as the trustee is due to lodge the 2017-18 financial
year SMSF annual return.
– if the SMSF is reporting quarterly, this will be 28 October 2018.
Note: An SMSF is required to report earlier if a member has exceeded their transfer balance cap and any
SMSF can choose to report events as they occur and in some instances are encouraged to do so by the ATO
to avoid incorrect excess transfer balance cap determinations being issued. For example, if an SMSF
member rolls their super benefit into an APRA regulated fund and starts a retirement phase income stream
there and the rollover is not reported to the ATO by the SMSF at the time, a double-counting of the member’sincome streams will occur. This is because there will be a mismatch in timing of the reporting done by the
APRA regulated fund and the SMSF.
To work out if the quarterly or annual arrangements apply, an SMSF will need to understand the total
superannuation balance of all of its members at the later of:
– 30 June 2017 if a member had a pre-existing income stream or where the first member starts their first
retirement phase income stream during the 2017-18 financial year; or
– 30 June the year before the first member starts their first retirement phase income stream.
Note: Where an SMSF has only one member with an individual total superannuation balance of $1 million or
more, it must report all events for all members within 28 days after the end of the relevant quarter, even if the
balance of the first member to start a retirement phase income stream is below $1 million. Once the reporting
framework is set, SMSF trustees will not be expected to move between annual and quarterly reporting due
dates, regardless of fluctuations to any of its members’ balances.
When you need to report sooner
If a member exceeds their transfer balance cap, the following events must be reported sooner:
– a voluntary member commutation of an income steam in response to an excess transfer balance
determination must be reported within 10 business days after the end of the month in which the commutation
– responses to commutation authorities must be reported within 60 days of the date the commutation authority
Should you have any question in regards to event based reporting, please feel free to contact us on 03 9557 3138 or firstname.lastname@example.org