News

ATO, Compliance

Proper procedure needed with TBAR corrections

The ATO has stipulated certain processes are absolutely necessary to correct any errors relating to transfer balance account reports (TBAR).

ATO tax counsel network representative Tara McLachlan told delegates at the recent 2018 Self-managed Independent Super Funds Association Annual SMSF Forum in Melbourne that TBAR corrections must allow the regulator to identify the original report and properly record the amended information.

“The thing to remember with transfer balance is that because a member can have multiple pensions paid from the same fund, we have to treat every report that comes in to us as a new event because we’re not to know otherwise. So if you need to correct information, you need to cancel the incorrect report and then, if necessary, re-report it,” McLachlan said.

“If you don’t cancel the incorrect report, and just try to report what you might see as an amendment, we won’t know and we’ll just record it as a new event and you’ll end up with a duplication.”

She emphasised cancellations must be clearly identifiable regardless of whether a hard-copy form or an electronic form is being used.

“The other thing to remember when cancelling, you need to report exactly the same information as the information you want cancelled. That way we can match it up,” she said.

According to McLachlan, the ATO has already identified common errors being made with TBAR.

“Common issues that we’re finding in TBAR that’s causing errors are reporting of commutations or any event prior to 30 June 2017, incorrect ABN (Australian business number) or tax file numbers, incorrect values, incorrect member information or reporting pensions not paid by the SMSF,” she revealed.

She added incorrect information or omissions will cause a TBAR to be suspended, in which case the ATO will attempt to contact the SMSF trustees to find a resolution.

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