The Australian Taxation Office (ATO) has announced information regarding personal transfer balance caps (TBC) will be made available to members from 11 July 2023 and urged funds to report any relevant events before the 1 July deadline.
The SMSF regulator’s announcement follows the release of official inflation figures of 7.8 per cent in January, which triggered an automatic increase of the indexed TBC from $1.7 million to $1.9 million.
Starting from 11 July, the regulator stated fund members and their tax agents will be able to access their personal TBC details through ATO online services and they should report any TBC-related events before 1 July to ensure accurate cap calculations are available to members.
“While indexation will occur on 1 July 2023, we won’t be displaying members’ personal transfer balance caps until 11 July 2023,” it said.
“You can continue to report transfer balance cap information to us between 1 and 11 July 2023, however, we will not be processing reporting during this period.
“This means we won’t be able to issue or revoke excess transfer balance determinations we have sent to a member or commutation authorities we have sent to a fund.”
The ATO has previously emphasised a member’s personal TBC would be calculated based on the information available at the close of business on 30 June 2023 and late reporting of relevant data may affect the accurate calculation of a member’s TBC.
“We identify the highest-ever balance in the individual’s transfer balance account. We’ll use this information to calculate the proportional increase in their TBC and apply that new personal TBC to their account going forward. This means they’ll have a personal TBC between $1.6 million and $1.9 million,” it said.
“If this [late or retrospective reporting] occurs, there may be significant consequences for the individual. We’ll reconsider if there was an entitlement to proportional indexation and apply this new information to their account.”