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The ATO has released its position on SMSF event-based reporting for the Transfer Balance Cap.  From 1 July 2018 the reporting regime for SMSF members is:

 Members with balance less than $1m

SMSF members with a total super balance of less than $1million will report events that impact their members transfer balances at the same time that the SMSF lodges its annual return.

 Members with balance less than $1m

SMSFs that have members with super balances of $1 million or more will be required to report events impacting members’ transfer balances within 28 days after the end of the quarter in which the event occurs.

All SMSFs must report details of ‘pre-existing’ income streams to the ATO by 1 July 2018.  A pre-existing income stream is an income stream the member was receiving on 30 June 2017, which continued to be paid to the member on or after 1 July 2017.

The approach of the ATO means that 85% of the SMSF population will not be required to undertake any additional reporting outside of current annual reporting timeframes, for the foreseeable future – which is great news.

For those with a balance over $1 million, reporting is required 28 days after each quarter – but only on events that impact their transfer balance (ie debits and credits).

Credits to your account include:

  • Total value of pensions you are receiving at 30 June 2017 (initial reporting)
  • Value of any new pension income streams, including death benefit income streams, that you begin or receive after 1 July 2017
  • Value of reversionary super income streams at time you become entitled
  • Excess transfer balance earnings that accrue on any excess transfer balance accounts

Debits to your account include:

  • Reduce your excess transfer balance
  • Commutations (lump sum payments)
  • Structured settlements (such as payment for personal injury)
  • Family Law splits
  • Certain other events resulting in a reduction of your super interest, as result of fraud or dishonesty (must be of approved form)

NB: for capped defined benefit income streams, the credits above are calculated on the ‘special value’ of the income stream.