SMSF trustees should not be concerned the obligation to adopt real-time reporting, as a result of the super reforms brought down in last year’s budget, will lead to a significantly onerous administrative burden for their funds in the future, a technical expert has said.
Speaking at the SMSF Association Sydney Local Community breakfast yesterday, association head of technical Peter Hogan said: “For a lot of self-managed super funds if there’re two members, there will be two reportable events: when they start an income stream and that’ll be it for the two members, and then they won’t really have to report on anything else because they’ll just run the pension until someone dies and then that’ll become a reportable event.
“But they’re not going to be commuting and reshuffling things around and restarting or starting second pensions.
“Some funds will have more transactions to report. If you’ve got LRBAs (limited recourse borrowing arrangements), you’ll obviously have more reportable events because every time you repay the principal, that will be a reportable event.”
Hogan pointed out discussions the association has had with the ATO indicated real-time reporting for SMSFs will most likely be introduced midway through next year.
“I suggested a single start date for everyone and that was fairly enthusiastically taken up by most of the ATO people in the room,” he said.
“Whether that’s 15 May next year or probably more sensibly 1 July 2018 I would have thought, but it might be earlier than that, it’s not ultimately my decision in the end.”
He noted the initial real-time reporting requirements would only cover transfer balance account debit and credit transactions, with trustees having to report 10 days after the month in which the relevant transaction occurs.
Pension events would receive more lenient treatment with the reporting requirement to be 28 days after the quarter in which the pension commences “to give people time to appropriately value assets and so on”, he added.
While the obligation of real-time reporting may not begin until May 2018, he said advisers and their clients needed to be mindful of transactions occurring between 1 July 2017, when the reporting regime starts, and this date.
“Be conscious you’ll need to have [these transactions] valued because when the first reportable transaction does happen, you’ll then have to backfill the reportable history back to 1 July 2017 at that point in time,” he warned.