Awareness of TBCs an adviser duty

transfer balance caps duty

Advisers have a duty to ensure clients are under their transfer balance caps, rather than solely relying on ATO data.

SMSF advisers working with clients who may be pushing up against transfer balance caps (TBC) have a duty to ask their clients about what other superannuation and pension interests they hold rather than just relying on data available from the ATO, according to an SMSF legal expert.

Cooper Grace Ward senior associate Steven Jell said SMSF advisers and accountants were probably more aware of transfer balance account (TBA) events than the ATO and following the indexation of TBCs last year should be checking with clients first and then ensuring that information was reported to the regulator.

“With respect to TBC indexation and event reporting, where we are in a situation where we know everything about a fund but don’t have an obligation to report an event to the ATO until a much later date and then need to rely on the calculations provided by the ATO, we are the ones that are absolutely responsible for any issues associated with that,” Jell said during a session at the Cooper Grace Ward Virtual Annual Adviser Conference today.

“The ATO is required to publish that information, but it is only as good as the information that we give them.

“If we are talking with clients who are pushing up against those caps about commencing pensions, we need to be really careful about making sure that we’ve given everything to the ATO that we need to rely upon the information it provides.

“We should also be asking questions about how many funds have they got, if there are pensions in other funds or a death benefit pension somewhere as those types of things become really relevant.

“When we are the ones that are communicating information and relying upon a response, I think the buck stops with us when it comes to those types of problems as well.

“It is more than making sure we are aware of the issues because if we are asking clients the right questions and they are not giving us the information required, we can avoid risk as we work through that process rather than relying upon whatever gets fed out of the ATO system.”

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