ATO clarifies its SMSF reporting rules

Kate Cowling

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July 17, 2017

The Australian Taxation Office says its proposed new reporting rules should have a “minimal impact” on self-managed super funds, with many likely to have to report transactions only once.

According to John Maroney, head of the Self Managed Super Fund Association (SMSFA), the event-based reporting system has triggered questions from advisers about the frequency and detail the ATO would require under the proposed scheme.

SMSFs, and by proxy their advisers, will have to report transfer balance cap ‘events’ – such as credits and debits – via an approved form, something some advisers have worried would create a paperwork burden from July 2018.

However, the ATO Tax Counsel Network, which will clarify its position at the SMSFA’s Technical Days across Australia this week, says many SMSFs will have to report only once.

“The move to events-based reporting is anticipated to have a minimal impact on many SMSFs,” ATO assistant commissioner Alex Affleck told Professional Planner.

“In many cases, SMSF members will have only one transfer balance cap debit or credit in the life of their fund,” Affleck says.

Reportable events may include starting an income stream in retirement.

In most cases, events will have to be reported 10 days after the end of the month they occurred, with a slightly longer timeframe (28 days) for reporting limited recourse borrowing arrangements or income streams if a practical valuation issue arises.

For SMSFs without members in retirement, there probably would be no additional reporting requirements until an income stream was started. However, structured settlement debits for members in accumulation will require a report to ensure the SMSF member receives the appropriate transfer balance cap debit.

“Income stream value fluctuations, pension drawdowns and the ceasing of a pension (due to no funds remaining) are not events that need to be reported through the transfer balance account report,” Affleck says.

The ATO Tax Counsel Network has been working with the SMSFA to help advisers and trustees make sense of the July 1 super changes and what actions need to be taken now the deadline has passed.

One of the other matters they have been addressing is the total superannuation balance and how to make the appropriate calculations.

To register for the SMSF Association Technical Day, click here.


TOPICS:  ATOATO Tax Counsel NetworkSMSF AssociationSMSF Association Technical Day



Kate Cowling

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