If you are a member of a Superannuation Fund that has commenced a pension or are thinking of doing so, then this tip is for you.
As is often the case with legislative changes, the reforms to superannuation that commenced 1 July 2017 have delivered a series of new reporting requirements.
The reforms effective from 1 July 2017 introduced the concept of a transfer balance cap on superannuation members and essentially limits the amount an individual can invest in a pension account at $1.6M (the current cap is subject to indexation) in their lifetime. There are a number of events, including the commencement of an income stream that can count towards a cap and other events, such as the commutation of an income stream that can reduce the amount of the cap utilised.
To ensure compliance with the cap, all superannuation funds including self-managed superannuation funds will need to consider real time reporting of these events to the Australian Taxation Office on a quarterly basis. The reporting known as Transfer Balance Account Reporting (TBAR) will commence soon, with the first report covering all Transfer Balance Cap events for the 2018 financial year, including super income streams in existence just before 1 July 2017, which continued to be paid in the 2018 financial year. These are due to be lodged no later than 1 July 2018, although earlier lodgement maybe required if the cap has been breached during the period.
Following initial reporting by 1 July 2018, reports will be required on a quarterly basis due no later than 28 days after the end of the quarter.
There are exemptions on quarterly reporting requirements for smaller superannuation funds. There is no need for trustees of a Self-Managed Superannuation Fund to report if no member of a fund has a member balance in excess of $1M. However, if at any time any member’s balance exceeds $1M, then the Trustee must report all events for all members (regardless of balance). Those funds exempt from quarterly reporting due to size will need to report their activities on an annual basis as part of their Self-Managed Superannuation Fund Tax Return.
This new events based reporting framework highlights the increasing need to retain up to date Self Managed Superannuation Fund records and to document changes to accumulation and pension accounts on a real time basis.
Brentnalls NSW provide services that allow for this ongoing reporting to ensure that you have clear vision of your Self Managed Superannuation Fund balance and ensure that you are well placed to meet your regulatory obligations. Further, our systems are ready to identify the need to report as well as produce the data required to meet your reporting requirements on an ongoing basis.
If you wish to know more about your reporting requirements or how your Self Managed Superannuation Fund can be maintained on a real time basis, please call your advisors at Brentnalls NSW on (02) 8252 5555.
The table below summaries your reporting obligations: