What is it?
Since 1 July 2017, the ATO has a limit on the amount that can be transferred into the pension phase in superannuation. This is called the Transfer Balance Cap and it is currently $1.6million across all retirement phase pensions in all funds over the individual’s lifetime.
TBAR enables us to record and track an individual’s balance for both their transfer balance cap and total superannuation balance
What events are required to be reported?
SMSF only reports to the ATO if one of its members has an event that impacts on their Transfer Balance Cap. Reporting obligation will generally impact at the income level stage of the pension recipient therefore if a member has multiple income streams, reporting will be based on the value and account details on each of those income streams. What is required to be reported to the ATO:
- Pension commutations
- Commencement of any new superannuation income streams
- Cessation of any superannuation income streams
- Structured settlement contributions received on or after 1 July 2017
- Value of existing superannuation income streams as at 30 June 2017 (& in most cases up until 1 July 2018)
SMSFs with only accumulation balances in the fund are not required to report any transfer balance events, other than structured settlement contributions until a superannuation income stream commences.
What events are NOT required to be reported?
- Any ongoing monthly pension payments made on or after 1 July 2017
- Investment earnings and losses that occurred on or after 1 July 2017
- When an income stream ceases because the interest has been exhausted
- The death of a member
- Information that individuals report to us directly using a Transfer balance event notification form (NAT 74919). Typically, this is when the following events occur
- Family law payment split
- Debit event from fraud, dishonesty, or bankruptcy
- Structured settlement contributions made before 1 July 2007.
- Information other funds will report to us, such as a member’s interest in an APRA fund
How and when do these events need to be reported?
If a member’s pension balance in their SMSF at 30 June 2017 was greater than $1 million, reporting will be required. Any events that occur within each quarter will be required to be reported to the ATO within 28 days after the end of the specific quarter in which the event occurred.
Where all members of an SMSF have a total superannuation balance (in pension phase) of less than $1 million, the SMSF can report this at the same time as when its Annual return is due.
All super funds, including SMSFs will be required to report transfer balance cap (TBC) events via the TBAR, which can be submitted via one of the three following channels:
- A paper form
- An online form
- Bulk data exchange
Please contact our office for more information.