Advisers at risk with TBAR accountability

While the ATO has landed on the less frequent option for SMSFs lodging transfer balance cap reports (TBAR), advisers must still ensure clients thoroughly understand the timing and process for events-based reporting, a specialist industry law firm has warned.

“There has been a favourable announcement made very recently about TBAR, which means the compliance burden for the TBAR is going to be eased somewhat because we were looking at having real-time reporting go live for SMSFs from 1 July 2018,” DBA Lawyers senior associate William Fettes told the firm’s SMSF Strategy Seminar in Sydney last week.

“The ATO has now come out and said for SMSFs with members that have total super balances below $1 million, they’re not really in the sights of breaching the transfer balance cap, so that SMSF can report on an annual basis.

“Even though the burden of TBAR falls directly on the trustees, if a trustee is getting late lodgement penalties and so forth, they’re going to go back to their adviser and ask why they weren’t told about it.

“But I think realistically, the burden is going to be on you [advisers] to make sure it all happens.”

On 9 November, the ATO handed down its outcomes from its position paper and announced the TBAR regime would only apply to SMSFs with members who have total super account balances of $1 million or more.

These SMSFs would need to report events impacting on members’ transfer balances within 28 days after the end of the quarter in which the event occurs.

“As a result of this approach it is estimated that up to 85 per cent of the SMSF population will not be required to undertake any additional reporting outside of the current annual reporting time frames for the foreseeable future,” ATO deputy commissioner James O’Halloran said at the time.

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