Advisers need to make sure their clients are currently preparing for the new transfer balance account reporting (TBAR) regime even though its inception will not be until 1 July 2018, an advisory firm director has recommended.
Under the new TBAR requirements, SMSFs will have to report on all pension activity from the beginning of the next financial year. In addition, the reporting will be needed per pension as opposed to per fund.
“There’s really nothing much you need to do between now and 1 July 2018, however, if you haven’t reported all of your clients’ income streams as at 1 July 2017, on 1 July 2018 you’re going to have a very busy day of reporting,” Coopers Partners director Jemma Sanderson warned attendees at the Tax Institute Superannuation Conference held recently in Sydney.
“So when the new system comes online, which is expected to be 1 October this year, so not that far away, my recommendation to everyone is to start getting that reporting up to date.
“So as far as the annual return reporting process goes – you’ve done your CGT (capital gains tax) relief as part of it, then it’s worthwhile saying ‘I now know what the balance of all my client’s account is because we’ve just done the 2017 return, let’s now report that and the underlying tax components sooner rather than later’.”
According to Sanderson, the ATO has indicated SMSFs will have to report on any items that will add to an individual’s transfer balance account before 1 July 2018, unless they are related to an event that may impact a determination.
However, she pointed out Australian Prudential Regulation Authority-regulated funds will have to begin their real-time reporting from 1 October 2017, and as such if advisers had clients with non-SMSF pensions as well as SMSF pensions, it might be prudent to commence reporting for all of the income streams from this date, particularly if there was a resulting transfer balance account reduction.