The measure to prohibit annual lodgement of the transfer balance account report (TBAR) could see the ATO commence compliance activity to ensure the new reporting timeframe is adhered to, a technical specialist has noted.
“I haven’t seen any penalties imposed for late lodgement of TBARs. But once all SMSFs are on one reporting system, where it’s known for any transfer balance account event it has to be reported 28 days after the end of the quarter, it will be fairly simple [for the ATO] to work out whether a TBAR was lodged late or on time,” Accurium head of education Mark Ellem warned attendees of a technical webinar he hosted last week.
The announcement to scrap annual TBAR lodgement was made in June and will not be implemented until 1 July 2023, which gives advisers and their SMSF clients plenty of time to prepare for the change, Ellem said.
Further, he pointed out the other available processes that will enable an SMSF to meet the new quarterly reporting deadlines will mean funds will have no excuse for non-compliance.
“We’ve got [the rules] where we can use a reasonable estimate of the balance when we’re commencing a pension and we’ve got the ability to lodge on that reasonable estimate and then cancel and re-report an updated correct figure,” he noted.
The ATO recently clarified how the transition to the new TBAR timeframe will be applied.
To this end, all SMSFs that were lodging TBARs at the same time as their annual return will be brought into the quarterly reporting regime immediately.
This means an SMSF that was reporting annually will have until 28 October to lodge a TBAR for any pension transactions, such as partial or full commutations, for the 2023 income year rather than when the annual return is due, which for trustees using a tax agent would be in February of the following calendar year.
