From January 2018 the ATO will start sending Excess Transfer Balance (ETB) Determinations to individuals who have exceeded their transfer balance cap and not rectified the excess. These will generally be based on information APRA funds will have reported to the ATO.

If an SMSF member receives one of these ETB Determinations, remember:

  • If the SMSF trustee must report information for that member, to the ATO (if they have not already done so). The ATO needs all the information about the member’s circumstances. If additional time is needed, the member can request an extension of time.
  • The sooner the member removes the excess amount, set out in the ETB Determination, out of the retirement phase portion of the fund, the less excess transfer balance tax they will pay.
  • They must commute the amount set out in the ETB Determination from retirement phase. Removing it by making a large pension payment will not result in a debit in their transfer balance account, so they will still be in excess of their transfer balance cap.
  • Unless they are commuting a death benefit income stream, they do not need to remove the amount set out in the ETB Determination from the super system. They can keep the excess in an accumulation phase account.
  • The trustee must ensure that the minimum pension payment standards are met at the time they commute the income stream.

[ATO website – ETB Determinations; FJM; LTN 233, 5/12/17; Tax Month Dec 2017]

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