In a recent Australian Taxation Office (ATO) SMSF New Measures Consultation Forum (held on 28 March 2017), the ATO indicated that ‘events’ based reporting will be required for the following transfer balance cap events:
- When a SMSF complies with a commutation issued by the Commissioner;
- When there is a full commutation of a member SMSF income stream in retirement phase;
- When there is a partial commutation of a member SMSF income stream in retirement phase; and
- When a SMSF member’s entitlement arises from a structured settlement.
The ATO in the meeting has expressed a desire to work with and support the SMSF sector to transition to a more timely ‘events based’ reporting of events relevant to a member’s transfer balance cap and total superannuation balance.
It is acknowledged that this model provides some practical challenges and will require sufficient time for the industry to transition to a model of regular ‘events based’ reporting.
But importantly it sends a clear message to practitioners about the approach of their SMSF business model moving forward, not only to deliver more effective services to trustees, but also to now comply with the regulatory obligations imposed by the transfer balance cap.