On the 01/07/2018 Self Managed Super Funds will be required to meet the new Event-Based reporting obligations. This is due to the new transfer balance cap measure and the event based reporting framework. From the 01/07/2017 there is a limit on the total amount you can transfer into pension phase inside your superannuation account. This amount is call the transfer balance cap, which starts at $1.6 million and will be index periodically in $100,000 increments. Your transfer balance cap must be reported to the ATO by the 01/07/2018 in relation to all pre-existing income streams.
From the 01/07/2018 all Self Managed Super Funds must report events that affect their member’s transfer’s balances. When you have to report depends on the size of your income stream. Timeframes for reporting are determined by the total superannuation balances of the SMSF's members:
- where all members of the SMSF have a total superannuation balance of less than $1 million, the SMSF can report this information at the same time as when its annual return is due, or
- SMSFs that have any members with a total superannuation balance of $1 million or more must report events affecting members’ transfer balances within 28 days after the end of the quarter in which the event occurs.
A SMSF is required to report earlier if a member has exceeded their transfer balance cap.
To ensure that you are reporting on time it is important that your administration services are up to date and using the latest software. It will no longer be good enough to lodge the information in May of the following year, some 9 months after the end of the financial year. Late lodgement will incur penalties and the need to provide a response to the ATO as to why the breach occurred.
We recommend that you take a look at your current administration services for your SMSF to ensure that they are sufficient to meet the new requirements. If you have any concerns contact Grow Your Wealth and we will be able to assist you.