SMSF trustees must accurately report accumulation and retirement-phase values in their annual return to ensure they have an accurate total super balance (TSB), with the ATO flagging this as an area of oversight, according to the Institute of Financial Professionals Australia (IFPA).
IFPA head of superannuation and financial services Natasha Panagis recognised the ATO was reminding trustees of the importance of reporting the correct value in the X1 and X2 fields in the member information section of the SMSF annual return.
“What the ATO is saying is that a failure to do so may lead to an inaccurate figure when viewing the TSB figure in ATO online services and a zero TSB could be displayed for a number of reasons,” Panagis said during a recent webinar held for members of the industry body.
“It could be because the ATO does not have any information available for that financial year or the amounts reported by the fund to the ATO for TSB purposes do not match the account balance on the SMSF annual statement or the fund has reported the accumulation-phase value as a different or a zero amount.”
She said when reporting these values, different factors applied for the accumulation-phase and retirement-phase values and they used dissimilar timings throughout the year.
“For an accumulation-phase value, we are looking at the total amount of super benefits that would be payable if all super interests were ceased, for example, if the trustee was to close down all their super accounts at that point in time. Typically that’s going to be the withdrawal value from an accumulation fund,” she noted.
“For the retirement-phase value that’s going to apply for individuals with a transfer balance account and that’s going to be the transfer balance value as at 30 June.”
Incorrect figures for a TSB can also occur where the SMSF account balance is used in its calculations, which can lead to incorrect estimations of what bring-forward non-concessional contributions are available to a trustee.
