Self-managed super funds (SMSFs) on a quarterly Transfer Balance Cap (TBC) reporting schedule must make their first lodgment with the Australian Tax Office (ATO) in three weeks, warns SMSF Association Head of Policy Jordan George.
“SMSFs on the quarterly schedule will have to report any TBC events for the first quarter of the 2018-19 financial year by 28 October 2018.
“For the typical pension commencement date on 1 July 2018, this will require the commencement of the pension to be reported by the end of October.”
SMSFs with 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. Those funds that do not will continue to report annually.
Even when an SMSF has only one member with an individual total superannuation balance of $1 million or more, it must report all events 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.
George says it’s important to remember that once an SMSF is assessed as either annual or quarterly reporting, it remains on that schedule for the life of the SMSF.
“As SMSFs generally align the valuation of their assets with the completion of their end-of-year financial accounts, it’s possible that funds will not know the exact value of their income stream by this date.
“However, the ATO has stated that SMSFs can use its valuation guidelines, and, if the valuation is consistent with these guidelines, it will accept a ‘reasonable estimate’ of the starting value of a retirement superannuation income stream.”
The Association has a Go-To-Guide on TBAR reporting that contains information for advisers on their reporting obligations, click here to read it.