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ATO to streamline transfer balance cap reporting framework

The ATO is seeking consultation on its move to implement a streamlined framework for the transfer balance cap events-based reporting.

Tax&Compliance Tony Zhang 12 November 2021
— 1 minute read

In a recent update, the ATO said it is seeking feedback on moving to a single transfer balance cap events-based reporting framework for all self-managed superannuation funds (SMSFs).

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The ATO uses transfer balance account reporting to determine an individual’s personal transfer balance cap, whether they have exceeded their cap and to apply the appropriate consequences if an excess has occurred.

There are currently two different timeframes for transfer balance cap events-based reporting, depending on total super balances. 

“The ATO is looking to streamline transfer balance cap events-based reporting arrangements so that the same reporting timeframe applies to all SMSFs which will deliver better outcomes and provide more timely transfer balance account reporting,” the ATO said.

All SMSF industry stakeholders are welcome to provide feedback andThis email address is being protected from spambots. You need JavaScript enabled to view it., Superannuation and Employer. The consultation is expected to be completed by December 2021.

The event-based reporting (EBR) framework for self-managed super funds (SMSFs) commenced on 1 July 2018. It enables the ATO to administer the transfer balance cap. SMSFs generally need to start reporting to the ATO, under the EBR framework, when the first member commences a retirement phase income stream.

Timeframes for reporting are determined by the total superannuation balances of an SMSF's members unless the member has exceeded their personal transfer balance cap and has been sent an excess transfer balance determination or their fund has been sent to a commutation authority.

SMSFs that have any members with a total superannuation balance of $1 million or more on 30 June the year before the first member starts their first retirement phase income stream, must report events affecting members’ transfer balances within 28 days after the end of the quarter in which the event occurs.

When all members of an SMSF have a total superannuation balance of less than $1 million, the SMSF can report this information at the same time as when its SMSF annual return (SAR) is due.

Once the reporting framework is set, SMSF trustees will not be expected to move between annual and quarterly reporting, regardless of fluctuations to any of the members' balances or changes in fund membership.

The ATO had noted previously it will continue to evaluate the reporting frameworks' benefits and risks. For example, the $1 million reporting threshold may be re-evaluated in the future, given indexation of the general transfer balance cap. 

ATO to streamline transfer balance cap reporting framework
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Emma Ryan

Emma Ryan is the deputy head of content at Momentum Media and editor of the company's legal publication, Lawyers Weekly.

Emma has worked for Momentum Media since 2015 and has been responsible for breaking some of the biggest stories in corporate Australia. In addition, she has produced exclusive multimedia and event content related to the company's respective brands and audiences.

A journalist by training, Emma has spent her career connecting with key industry stakeholders across a variety of platforms, including online, podcast and radio. She graduated from Charles Sturt University with a Bachelor of Communications (Journalism).

Tax&Compliance