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TSA to be

To be, or not to be. Actually, when to TBAR. That is the question.

Alas, after navigating through the June 2017 reforms; transfer balance caps, CGT relief, new contribution caps and total superannuation balances, it is time to take arms against a new sea of troubles…

What is a TBAR and why is it needed?

“Though this be madness, yet there is method in it”

As we are all aware, the transfer balance cap (TBC) of $1.6M is now in place from 1 July 2017 to limit the amount of money our clients can have in retirement phase within the super environment.

To enforce compliance the ATO has measures in place to deal with members exceeding the limit including requiring excess amounts to be commuted and taxes being levied on notional earnings on these amounts.

The TBAR (transfer balance account report) provides the ATO with ongoing information on each member running TBC.

Initially the ATO were requiring SMSF’s, from the 1 July 2018 to report relevant TBC events every quarter.

Such events were to include:
– Commencement of a retirement phase income stream
– Commutation of a retirement phase income stream

Concessions have now been given resulting in the majority of SMSF’s only having to report once a year at the time of lodging their annual tax return. The table below outlines the new reporting guidelines.

Importantly, a reporting deadline of 1 July 2018 applies for all SMSF’s to report the balances of income streams being paid at 30 June 2017 that continue to be paid after 1 July 2017.

General Reporting Deadlines


Whilst given a broad outline of the new rules, this table does not cover every circumstance. Reference should be made to the ATO’s detailed guidelines.

Should you report earlier?

There may be good reasons to report TBC events as they occur rather than wait till year end.

Two situations come to mind:
– Commuting and rolling an income stream from a SMSF to an APRA Fund to avoid double counting.
– Where you know an event has caused a member to exceed their TBC and subsequent commutations.

Reporting early may prevent the issues of an excess TBC determination and reduce the amount of tax payable on notional excess earnings.

“That it should come to this!”

More compliance, more time, more costs….You do not protest too much, methinks.

Together, the industry is working through the plethora of changes thrust upon us. We should draw some comfort on past practice of the ATO focusing on education and not punishment during periods of great change.

As always, we are happy to take your call with questions or clarifications on the new reporting rules and how they apply to your situation.

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