The total super balance of the individual members of an SMSF is the determining factor of how often a particular fund will have to complete a transfer balance account report (TBAR), rather than the total super balance of the member who is drawing a pension.
“So if you had mum and dad in a fund and they’re both in accumulation phase but then dad decides to start a pension, and he’s the first one to start, then you have to determine what the total super balance of each member in that fund at 30 June prior to the commencement of that pension is,” SuperConcepts technical services executive manager Mark Ellem said.
“Does one member at least have a total super balance of $1 million? If yes, the SMSF’s TBAR will be done quarterly, if no, then the SMSF’s TBAR will be done annually.
“Importantly, it’s not about looking at the total super balance of the member starting the pension.
So if dad starts the pension, and he’s only got a total super balance of $600,000, but mum doesn’t start a pension but she’s got a total super balance of $1.2 million, that fund will be a quarterly reporter.”
Ellem pointed out the initial determination of the TBAR frequency will never change.
“Once an SMSF is determined to be an annual or quarterly reporter, it will forever be an annual or quarterly reporter no matter what happens after that,” he noted.
“You will not have to reassess the reporting status and you can’t change.”
Late last year the ATO announced SMSFs with at least one member in pension phase but with all members having a total super balance of less than $1 million would be able to report events affecting their transfer balance accounts as part of the fund’s annual return.
The regulator also stipulated funds with at least one member drawing a pension and at least one member with a total super balance of $1 million or more would have to report any transfer balance account event within 28 days of the end of the quarter in which the event took place.