ATO affirms SMSF event-based reporting rules

Self-managed super funds (SMSFs) with a balance of $1 million or more will be subject to an event-based reporting regime from 1 July 2018, the Australian Tax Office announced.

SMSF members have 28 days after the end of the quarter to report an event, which would include the commencement or commutation of a retirement phase pension. Other SMSFs with balances less than $1 million will continue to report annually.

ATO deputy commissioner James O'Halloran said it is important to note that in all cases, reporting is only required if an event impacts or potentially breaches the $1.6 million transfer balance cap actually occurs.

"As a result of this approach it is estimated that up to 85% of the SMSF population will not be required to undertake any additional reporting outside of current annual reporting timeframes for the foreseeable future." O'Halloran said.

The ATO issued its stance on SMSF event-based reporting in August, which received concerns about the effort and costs that may be associated with the proposed approach.

O'Halloran added: "The ATO believes that the combination of these approaches sensibly balances administrative ease and efficiency with the increased need for transparency across the superannuation system."

SMSF Association chief executive John Maroney welcomed the proposal at the time, saying with the introduction of the transfer balance cap, it would be in SMSF trustees' best interests to report information as soon as possible to prevent any notional earnings accruing in excess of the cap.

The Self-managed Independent Superannuation Funds Association (SISFA) welcomed the latest announcement after working closely with the ATO to achieve practical modifications to reporting.

"The proposed new reporting framework is more targeted than the original blanket approach, which would have proved problematic and costly in practice, for little or no benefit," SISFA said.

SISFA added the ATO's position represents a significant concession to the original options proposed, which would have required all SMSFs to report prescribed events quarterly or monthly.

Read more: SMSFATOSISFAAustralian Tax OfficeIndependent Superannuation Funds AssociationJames O'HalloranJohn Maroney
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