ATO, Tax

TBAR cancellation errors avoidable

The ATO has advised SMSF trustees and their tax agents that information provided in a cancellation transfer balance account report (TBAR) should exactly match previously provided information to ensure the cancellation proceeds.

In information posted to its website detailing online services for agents, the ATO stated the correct provision of information would help it match the previously reported information with what trustees wanted to cancel.

“If we can’t match your cancellation TBAR to the information already reported to us, it will suspend for manual review,” it said.

Additionally, the trustees and agents should not lodge a second TBAR reporting the correct value of the income stream being reported to the regulator, which said this would cause it to double count the information.

It said agents and trustees should not lodge a TBAR and then include on the cancellation TBAR the correct value of the income stream that has already been reported.

“This will generally create reverse workflow for you and lead to delays in correcting the information. The TBAR form will suspend because it can’t find the information you are trying to cancel and we will need to contact you to resolve the situation,” it said, adding trustees and agents should instead cancel the incorrect information and then report the correct information.

“It is an individual’s responsibility to ensure they do not exceed their transfer balance cap, however, we make available a range of information online to help individuals, their agents and advisers monitor their affairs and avoid exceeding their transfer balance cap.”

Instances of double reporting in the TBAR regime have already been flagged by a legal firm specialising in SMSFs and earlier this month the ATO also advised trustees not to report matters that were unrelated to their SMSF.

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