ATO, Documentation, Superannuation

TBC change needs data access

TBC indexation ato data

The SMSF sector will need access to data held by the ATO related to transfer balance caps (TBC) ahead of its indexation to prevent further confusion and errors, an administrator has claimed.

The indexation of the transfer balance cap (TBC) later this year has further highlighted the need for SMSF advice practitioners to have access to client information held by the ATO, with one administrator predicting chaos due to the lack of visibility in data related to the cap.

SMSF Alliance principal David Busoli said requests have been made to the ATO in the past to provide access to TBC information for SMSF clients, but access had yet to be granted.

Busoli believed a number of transfer balance account errors probably still existed within ATO data despite around 20,000 incorrect excess determinations being identified at the time TBCs were introduced.

“They were caused by a combination of confusion on the part of the lodging accountants and problems with the ATO processes at the time,” he said in an update sent to clients and business partners.

“Importantly, only those determinations were investigated. How many others were wrong, but as they did not breach the $1.6 million cap, were never rectified?

Speaking to selfmanagedsuper, he said the potential number of TBCs that were incorrect was unknown and many would not be discovered until superannuation fund members started a pension.

“These will be a problem that will appear on an individual basis and some people may not even spot the error and just the TBC that is reported to them,” he said.

He said the superannuation administration sector wanted to be able to check its records with those held by the ATO to ensure there were no errors and the limited access available only to accountants was insufficient.

“We are flying blind, and while accountants can check data on an individual basis, there is no access for financial advisers and no bulk access for administrators or even for trustees who may not have an accurate starting point for TBC,” he said.

He said the lack of accessibility to the ATO’s TBC data would also create difficulties with assessing total super balances and fund balances for bring-forward provisions once the TBC had been indexed from 1 July.

“It has been hard enough to date working with a standard TBC limit of $1.6 million but from next year when each TBC may be different, it will be chaos with numbers all over the place which is why we need the visibility now,” he said.

“The ATO is aware of the issue but are still dependent on funding from Treasury to allow access.”

Last year, Busoli noted the lack of real-time data from the ATO, compared to that provided by the Australian Prudential Regulation Authority, was impacting transfer balance account reporting for SMSFs.

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