SMSFs that have previously lodged a transfer balance account report (TBAR) on an annual basis will no longer be permitted to do so after the ATO stated it plans to streamline the process from 1 July 2023.
In a website update, the ATO said it will change transfer balance account reporting by removing the total super balance threshold and requiring all SMSFs to lodge a TBAR 28 days after the end of the quarter in which the event has occurred.
“Please note funds [or] trustees may choose to report transfer balance account events more frequently,” the regulator said.
“This allows individuals to better manage their transfer balance cap and avoid excess transfer balance tax. For example, this would be beneficial when the member rolls over their interest from an SMSF to an Australian Prudential Regulation Authority fund.”
The obligation for SMSFs to report earlier will remain for a commutation of an income stream in response to an excess transfer balance determination, which is 10 business days after the end of the month in which the commutation has occurred, and for a response to a commutation authority by the legislated due date as specified on the notice.
The ATO stated the change is the result of consultation with the community, industry and tax professionals on streamlining the lodgement of transfer balance account event-based reporting for all SMSFs.
The SMSF Association applauded the ATO’s response to industry concerns about the commencement date by deferring it to 2023.
In a separate update addressed to superannuation funds, the ATO has highlighted the reduction in the eligibility age for downsizer contributions from will go from 65 to 60 from 1 July 2022 and should not be confused with announcements by the previous government regarding a reduction to age 55.
“From 1 July 2022, people aged 60 years and over will be eligible to make downsizer contributions of up to $300,000 per person ($600,000 per couple) from the sale proceeds of their home into their super,” it stated.
“During the 2022 federal election the government announced it would support a further reduction to the downsizer eligibility age to 55 years. This is not yet law. We understand that this may have caused some confusion for you and your members.”
The ATO recommended all super funds advise members that any contributions made by those aged 55 to 59 will not be treated as downsizer contributions and must be reported as personal contributions, which may result in members exceeding their non-concessional contributions cap.
