Advisers getting TBAR value wrong

Advisers have been told to use extra caution around the value used on a transfer balance account report (TBAR) as many have been submitting the wrong figure.

“Question 18 on the form is about the value of the income stream and just be careful here because if you are reporting capped defined benefit income streams that existed before 1 July 2017, it is the special value just before 1 July 2017 that you should be using,” SuperConcepts technical services and education general manager Peter Burgess said during the firm’s webinar today.

“We’ve already seen some advisers putting in the wrong value there – they’ve been using the market value in the box.

“If it’s an account-based pension that existed before 1 July 2017, it is the value just before 1 July 2017.”

Burgess reiterated while TBAR is a prescribed form and penalties can apply for late lodgement, the sector has been provided with some leniency in transitioning to and operating in the TBAR regime.

“The ATO has made it very clear that they do not intend to hand out penalties at least in the early stages of the reporting regime and where TBARs are lodged late,” he said.

“But in the future, a client’s SMSF may be subject to penalties, though the ATO does not intend to deny exempt current pension income claims if an SMSF does not report their TBAR events on time.”

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