Superannuation Transfer Balance Account Report (TBAR) is a new regime where SMSFs are required to report those events which impact on a Member’s transfer balance account on a real-time basis. There has been a lot of controversy over TBAR. The Tax Office has now finalised the details of TBAR reporting requirements.
From 1 July 2017, where all Members of the SMSF have a total superannuation balance of less than $1 million, the SMSF can report this information at the same time as when its annual return is due. SMSFs that have any Members with a total superannuation balance of $1 million or more must report events affecting Members’ transfer balances within 28 days after the end of the quarter in which the event occurs.
There are certain events which must be reported to the Tax Office under TBAR. Please note investment gains or losses and pension payments do not affect the balance of your transfer balance account. Common events are as follows:
- Income streams a Member was receiving on 30 June 2017 that
- continued to be paid to them on or after 1 July 2017, and
- are in retirement phase.
- New retirement phase income streams
- Some limited recourse borrowing arrangement payments
- Compliance with a commutation authority issued by the Commissioner
- Personal injury (structured settlement) contributions
- Commutations of retirement phase income streams
For more guidance, please see the ATO booklet here:
Trustees can download the TBAR report here to report the events directly to the Tax Office. Alternatively, we charge $350 for preparing and lodging a TBAR report. Please note separate TBAR report is required for each Member. A maximum of four events for a Member can be reported in one TBAR report.
It is important for Trustees to lodge the TBAR report on time. Otherwise, your Member’s transfer balance account and Total Superannuation Balance may be adversely affected and the Trustee may also be subject to compliance action and penalties.
The definition of ‘total superannuation balance’ is complicated but essentially includes all of your super accounts (both in accumulation phase and in retirement phase) from all sources/Funds.
An individual’s Total Superannuation Balance includes the following three items:
- The value of all superannuation interests in accumulation phase
- The balance of a Member’s transfer balance account
- ‘In transit’ rolled over superannuation benefits (that are not yet reflected in the balances mentioned in the previous two bullets)
For more information on “Total Superannuation Balance” , Please see the ATO Guidance here:
If a Lump Sum is paid from the pension account, remember to lodge a TBAR as it is a reportable event. When instructed we can lodge a TBAR on your behalf.
Be mindful to take out the minimum pension from the income stream account in addition to the lump sum withdrawal as the lump sum payment is not counted towards the minimum pension. If a minimum pension payment is not withdrawn your pension account will revert back to accumulation phase. This will result in losing the tax free nature.
For more guidance on lump sum withdrawal, please see our page:
For more information on the Superannuation Transfer Balance Cap, please visit our $1.6m Transfer Balance Cap page here.