Yesterday, the ATO announced that the implementation of SMSF event-based reporting from 1 July 2018 will be limited to SMSFs with members with total superannuation account balance of $1 million or more.
From 1 July 2018, SMSFs that have members with total superannuation account 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.
While opinions on the issue have been divided, the Institute of Public Accountants has joined several industry voices in welcoming the change.
“Given the changes that occurred to superannuation that took effect from 1 July 2017, the landing point before reporting becomes mandatory is a sensible position taken by the ATO,” said IPA chief executive Andrew Conway.
“The $1 million threshold represents an appropriate risk-based approach for the ATO to monitor breaches of the $1.6 transfer cap and is targeted to only impact likely offenders rather than the entire pension balance population.”
“The SMSF industry can breathe a sigh of relief that the reporting will not impact the majority of funds in pension mode. Trustees can also rejoice as unnecessary reporting will not add to administrative burdens eating into their retirement balances,” he added.
“The relief will provide more time for the SMSF industry to adjust to a more contemporary reporting model over time. If a fund has one member in pension mode with a large balance, it will, by default cause the fund to have real-time reporting in place but we believe the industry can live with this scenario compared to all-in approach across all funds.”
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Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.