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TBAR – reporting obligations

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The legislation imposes a significant obligation for Trustees to monitor member funds.

Monitoring will be facilitated by the Australian Taxation Office (ATO) event-based reporting framework. This event-based reporting requirement is a significant shift in SMSF administration processes, making it essential for SMSF specialists, administrators, advisers and trustees to understand the implications of the legislation and the event-based reporting framework.

Reports can be lodged online using the ATO’s business portal, or by downloading a form from the ATO website, completing and mailing.

Agents may also use a spreadsheet for reporting.

SMSFs that were paying a retirement phase income at 30 June 2017 need to complete and lodge a TBAR on or before 1 July 2018.

If an SMSF member is in retirement phase and has a pre-existing income stream on 30 June 2017 that continues to be paid to them on or after 1 July 2017, it must be reported on the TBAR on or before 1 July 2018, even if the SMSF falls within the $1 million total superannuation balance (TSB) annual reporting carve-out.

If an SMSF has a member or members who have both accumulation and pension phase accounts as at 30 June 2017, the Trustee will be required to report both account balances via TBAR. The accumulation value will be the value as at 30 June 2017.

The ATO has announced that some leniency will be shown where SMSF Trustees fail to lodge the required TBAR reports by 1 July 2018, but request that all Trustees ensure TBAR obligations are met as soon as reasonably possible.
 
The Mclowd™ TBAR feature automates lodgement. If you are unable to understand the requirements adequately to use the Mclowd™ TBAR feature for lodgement, it is recommended you consult a qualified Professional for assistance

Failure to lodge a TBAR for members with balances over $1.6 million as at July 1 2017, and ensure withdrawal or transfer of the excess to an Accumulation Account is effected, could result in penalties. SMSF Trustees are urged to attend to compliance requirements as quickly as reasonably possible.

From July 1 2018, reports must be lodged whenever an event affects a members’ transfer balance. (See Compulsory Reports)

An SMSF is only required to report if an event impacts the transfer balance account held by one of its members.

Events that credit (increase) the cap are:

  • Receipts of super interest supporting income streams on 30 June 2017
  • Commencing an income stream on or after 1 July 2017 (including receiving a death benefit income stream)
  • The value of any reversionary income stream to which a beneficiary becomes entitled
  • Limited Recourse Borrowing Arrangement (LBRA) repayment events where LRBA is held in retirement phase and being paid down with accumulation phase money
  • Notional earnings accruing to excess transfer balance amounts

Events that debit (decrease) the cap:

  • Commutations of superannuation income streams
  • Structured settle payments contributed to superannuation
  • Certain payments arising from family law splits, bankruptcy, fraudulent or void transactions

 

TBAR Events that do not need to be reported (see Voluntary Reports) include:

  • Pension payments (including the aged pension or other government assistance)
  • Investment earnings or losses
  • When an income stream is closed because the income has been exhausted
  • Death of a member (although any reversionary income stream following death must be reported)

Information that individuals report to the ATO directly using Transfer Balance event notification form. For example, a family law split, bankruptcy or fraudulent or dishonest transaction

Where an SMSF member commences an income stream on or after 1 July 2017, the SMSF annual or quarterly reporting requirements will be based on the Transfer Starting Balance (TSB) of members as at 30 June in the income year immediately prior to the member starting the income stream.

Where all members of the SMSF have a TSB of less than $1 million on 30 June of the prior income year, the SMSF can report this information at the time its annual return is due.

If an SMSF has any members with a TSB of $1 million or more on 30 June of the prior income year, the Trustee must report events affecting the member’s transfer balance within 28 days after the end of the quarter in which the event occurs. The due date for reporting will be the latter of 28 October 2018 or 28 days after the end of the quarter in which the event occurred.