An industry lawyer has noted some common issues are already surfacing in the infancy period of the transfer balance account report (TBAR) framework, such as instances of double reporting.
“Duplicate reporting has occurred. So credit reports perhaps have been submitted by the SMSF trustees being very diligent, but of course the tax agent has also been very diligent [and has submitted the same thing],” DBA Lawyers senior associate William Fettes said in a recent webinar.
Fettes recommended advisers needed to be mindful of this occurring and to keep all channels of communication open to prevent the mistake from happening in the future.
In relation to these and other types of TBAR errors, he emphasised the need to have them nullified as soon as possible in the correct manner.
“It’s generally done on a per event basis so you can’t net off a cancellation, so where you’ve got things that need to be tidied up or fixed, you need to treat each of them separately and file the appropriate TBAR correction,” he said.
He also took the opportunity to remind SMSF practitioners certain TBAR issues have been flagged but do not have a solution that has been implemented yet in a formal manner.
“There are still some unresolved [issues relating to] transfer balance account debits, particularly in relation to market-linked pensions,” he said.
“There has been guidance on this that a fix is going to be coming, but to my knowledge as of today the fix is not in place yet.
“So if you have clients with market-linked pensions and they’re looking to restructure those market-linked pensions, be aware that there is still this technical flaw in the income tax assessment legislation about the value of the debit you will get.”
According to Fettes, holding off on these actions for the time being may be a more prudent strategy.
