When it comes to retirement pension accounts, people can’t just transfer any amount they wish into retirement phase. There is a cap or limit to the amount that can be transferred, which is known as the Transfer Balance Cap.
When someone starts or stops a retirement pension, the Transfer Balance Account (TBA) increases or decreases. To regulate this, the Australian Tax Office (ATO) implemented a new reporting regime from 1 July 2018, which requires an SMSF to report events that affect a member’s transfer balance. Such report is called the Transfer Balance Account Report (TBAR).
The TBAR is different from the SMSF Annual Return. It allows the ATO to monitor an individual’s balance for TBC, as well as Total Superannuation Balance (TSB).
On commencement of the reporting regime, details of pre-existing income streams (including value and type) that were being received on 30 June 2017 that
- continued to be paid to them on or after 1 July 2017
- were in retirement phase on or after 1 July 2017
From 1 July 2017 onwards
- details of new retirement phase and death benefit income streams including value and type (when a death benefit income stream is reversionary, the start date will be the date on which the member died)
- details of limited recourse borrowing arrangement (LRBA) payments (including the value and date of each relevant payment) if the LRBA was entered into on or after 1July 2017 (or a pre-existing LRBA was re-financed on or after 1 July 2017) where the payment results in an increase in the value of the member’s interest that supports their retirement phase income stream
- compliance with a commutation authority issued by the Commissioner
- details (including value) of personal injury (structured settlement) contributions
- details (including value) of commutations of retirement phase income streams that occur on or after 1 July 2017.
There are so many things to know about TBAR including how often and when to report, the exclusions from reporting, working out the reporting due date, and reporting methods. Learn about these details from the TBAR webinar of Effective PD. To subscribe, visit www.effectivepd.com.au. Effective PD offers an innovative way for busy accountants to be on top of their game with continuing professional development in a brief, flexible and easy way.
