The $1.6m transfer balance cap legislation, carries with it an obligation on trustees to submit a ‘Transfer Balance Account Report’ (TBAR) to the ATO about events that impact a member’s transfer balance accounts. This is under s390-5 of the TAA1 and the relevant determination made under that section. (See also Div 294 of the ITAA97 regarding ‘Transfer balance accounts’ generally and Div 136 of the TAA1.)

APRA-regulated funds have to report within 10 business days of the end of each month.

SMSF fund trustees have to report too. On 9 November 2017, the ATO finalised its position on how often they have to report.

  • For SMSF’s with members that have transfer balances over $1m, their trustee will have to report quarterly – within 28 days of the end of that quarter.
  • Those SMSF’s with with member balances under $1m, can report at the end of each year, with their annual return. The ATO expects this will relieve up to 85% of SMSF’s from having to report quarterly. The idea is reduce fund reporting costs in respect of members whose balances are comfortably short of the $1.6m cap.

This reporting regime will commence on 1 July 2018.

[ATO website – Announcement of $1m carve out, TBAR explained, Transfer Balance Cap; FJM; LTN 215, 9/11/17; Tax Month Nov 2017]

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