What seems like a worthwhile SMSF reporting requirement to help trustees that is being introduced from next year has potential to push local accountants out of the SMSF administration sector and play into the hands of major administrators.

In order to help administer the new transfer balance cap reporting, the Australian Taxation Office (ATO) is in the process of developing a self managed superannuation fund (SMSF) event based reporting regime. This new regime is likely to be in the form of a report to be called the Transfer Balance Account Report or TBAR. (Don’t you love another 4 letter acronym).

At this stage nothing has been finalised but the TBAR reporting regime is expected to be as follows:

• Where the event is a pension being commuted (ie stopped) in part or in full or a rollover occurs – that must be reported to the ATO with 10 business days after the end of the month that the event occurs.
• Where the event is the commencement of a pension – that must be reported within 28 days of the end of the quarter that the event occurs.

Transition Period

The ATO is also expected to introduce a transition period for events that occur in the first part of the 2018 year (ie from 1 July 2017):

• Where the event is the commencement or commutation of a pension, that event does not need to be reported until the SMSF is due to lodge its 2017 tax return (typically before May 2018)
• However, all events that occur after that date have to be reported in the normal manner (ie monthly or quarterly)
• The transition period will not apply to some events – such as rollovers

For many accounting practitioners, and SMSF trustees, this will be a fundamental change in how they manage the administer of their SMSFs. Where an SMSF trustee needs to commence, or commute a pension they can no longer see their accountant / administrator once a year. They will have to see their administrator before, or soon after, an event occurs. While accountants may have to prepare “real time” accounts so that they can lodge such reports. They will find it hard to pass on the additional costs to trustees and many will just not be able to cope with regular reporting.

Timing Problem

It is unlikely that many, if any, existing SMSFs administered by suburban accountants are capable of reporting on a monthly basis. For example, just a simple end of year reconsolidation of accumulation and pensions will now be reportable by the 10th August each year but many  tax reports from investment managers, AREITS and  platforms don’t come out until after this date. We presently minute the request  on 1 July but finalise implementing on receipt of financials later in the year.

Don’t panic: Many SMSFs will have no TBAR reporting obligations because they have no pensions or they are not starting any new pensions or commuting any existing pensions.

However, if you are an SMSF trustee that maybe affected by the new Transfer Balance Account Report (TBAR) regime, you should  ensure that your accountant / administrator have systems, staffing and processes in place that will enable your fund to comply with this new reporting obligation.

I hope this guidance has been helpful and please take the time to comment. Feedback always appreciated. Please reblog, retweet, like on Facebook etc to make sure we get the news out there. As always please contact me if you want to look at your own options. We have offices in Castle Hill and Windsor but can meet clients anywhere in Sydney or via Skype. Just click the Schedule Now button up on the left to find the appointment options.

Liam Shorte B.Bus SSA™ AFP

Financial Planner & SMSF Specialist Advisor™

Tel: 02　98941844, Mobile: 0413 936 299

PO Box 6002 BHBC, Baulkham Hills NSW 2153

5/15 Terminus St. Castle Hill NSW 2154

Corporate Authorised Representative of Viridian Select Pty Ltd ABN 41 621 447 345, AFSL 51572

This information has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation and needs. This website provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such.