Quarterly TBAR not absolute

Quarterly TBAR

SMSF trustees can lodge their required TBAR more frequently than the soon-to-be mandated quarterly timeframe should it be beneficial to do so.

A superannuation executive has reminded advisers and their clients that while all SMSFs will have to lodge their transfer balance account report (TBAR) for certain pension activity on a quarterly basis from 1 July 2023, trustees are not restricted to this timeframe.

“SMSFs can choose to report [their relevant transfer balance account actions] as frequently as they like. It’s going to be quarterly going forward, but that doesn’t stop them from reporting earlier if they so wish. So they could do it on a monthly basis if they wanted to,” Tax and Super head of superannuation Natasha Panagis said during a technical webinar today.

“And that might actually be helpful for some SMSFs to better manage their transfer balance cap and potentially avoid excess transfer balance tax particularly if, for example, [the trustees are] looking to roll out [member] benefits [from the fund], wind [it] up and move to an APRA (Australian Prudential Regulation Authority) fund.”

Situations such as this could create problems for individuals due to the requirement for APRA-regulated funds to report the commencement of a member’s pension to the ATO within 10 working days of the event, Panagis pointed out.

It would mean for a person who ceased an account-based pension in their SMSF on 1 July, rolled their benefits over into an APRA-regulated fund and commenced a new pension on 14 July, the new fund would have to lodge a TBAR before 24 July, she said.

If the SMSF adhered to the quarterly TBAR regime and did not report the commutation of the member’s account-based pension until 28 October, a transfer balance account debit would not be recognised until then and the ATO records would reflect two income streams for the member, she noted.

“That might cause him and the ATO to think he’d exceeded his transfer balance cap,” she warned.

“So in situations like this trustees should consider lodging their TBARs even earlier than 28 days after the end of the quarter to avoid adverse outcomes and the paperwork involved to try and rectify this situation.”

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