The Australian Taxation Office has finalised arrangements for the introduction of new “event-based” reporting rules for self-managed superannuation funds, with some important modifications to its original proposal.
The new reporting requirements, which take effect from July 1 next year, are a by-product of the transfer balance cap rules introduced in July. All superannuation providers, including SMSFs, will be required to report data relating to transactions associated with the payment of retirement phase income streams on an event basis.
“Events” that need to be reported include commencement of superannuation income streams (pensions), limited recourse borrowing arrangement repayments, commutations, compliance with a commutation authority issued by the ATO, personal injury contributions and superannuation income streams that stop being in the retirement phase.
The ATO’s most significant concession is that the reporting rules will only apply to SMSFs that have members with balances of $1 million or more.
ATO deputy commissioner James O’Halloran says: “As a result of this approach we estimate that up to 85 per cent of the SMSF population will not be required to undertake any additional reporting outside annual reporting timeframes for the foreseeable future.”
SMSFs that do have members with balances of $1 million or more will have to report events impacting transfer balances within 28 days after the end of the quarter in which the event occurs.
In August, the ATO issued a position paper outlining its options for SMSF event-based reporting. “The feedback we received highlighted concerns about the effort and costs that may be associated with the proposed approach,” O’Halloran says.
“The ATO listened carefully to this feedback and we decided to provide an annual reporting timeframe for SMASFs with members with lower balances.”
SMSF Association chief executive John Maroney says the Association is pleased that the ATO responded to the industry’s concerns and adopted a balanced approach.
“This consultation shows that the ATO is willing to work with the industry to ease the implementation of event-based reporting. A large potential compliance burden has been reduced.” Maroney says.