Quarterly TBAR lodgement encouraged now

Quarterly TBAR

The ATO has encouraged SMSF trustees to begin the practice of lodging TBARs quarterly despite the requirement not commencing for six months.

The ATO has called on SMSF trustees to commence lodging their Transfer Balance Account Reports (TBAR) quarterly even though it is six months ahead of the transition to mandatory quarterly reporting for all SMSFs.

In an update on its website the regulator noted early reporting was useful in some instances and SMSFs with a balance below $1 million should start preparing for the shift from annual to quarterly reporting that will commence from 1 July this year.

As part of encouraging SMSFs to engage in early reporting, the ATO noted current transfer balance event reporting dates are dependent on a member’s total super balance (TSB) but only until 30 June and members with balances over $1 million must report quarterly while those below must report at least annually.

Addressing SMSF members with a TSB less than $1 million the regulator stated “from 1 July 2023, you will no longer be able to lodge annually. We recommend you start lodging quarterly now”.

“All SMSFs will be required to report quarterly, even if the members total super balance is less than $1 million. This means you must report the event that affects the members transfer balance within 28 days after the end of the quarter in which the event occurs.

The ATO noted that quarterly reporting will also alter what is included in the SMSF annual return (SAR) for this financial year.

“All unreported events that occurred before 30 September 2023 must be reported by 28 October 2023. This means you cannot report at the same time as your SMSF annual return (SAR) for the 2022–23 income year,” it said.

The ATO added SMSFs may be subject to compliance action and penalties for failing to lodge a TBAR on time and highlighted instances where early reporting was encouraged. These included events occurring in an income year before indexation of the transfer balance cap which may affect the ATO’s calculation of an individual’s personal cap.

Early reporting was also encouraged for situations where an SMSF member commutes their pension and rolls it over to another fund as doing so will prevent any income streams from being counted twice, and when a member’s pension account is rolled over due to the fund being wound-up.

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