TBAR lodgement quarterly for all from 1 July 2023

Date of article: 25 April 2023
Last updated: 25 April 2023

Transfer balance account event are required to be lodged quarterly from 1 July 2023 for all SMSFs. The Transfer balanced account report (TBAR) is required to be lodged 28 days after the end of the quarter where there are events affecting the Transfer balance account.

With the new lodgement timeframes, all unreported events prior to 30 September 2023 must be reported by 28 October 2023. This means that if you were lodging the TBAR annually at the same time you lodge your SMSF annual return (tax return), you will have reported events up to 30 June 2022, events from 1 July 2022 to 30 September 2023 must be reported by 28 October 2023. You cannot report the TBAR annually at the same time you lodge your SMSF annual return for the 2022-23 income year.

The ATO recommends SMSF starts lodging quarterly before 1 July 2023.

Prior to 1 July 2023, an SMSF will qualify as an TBAR annual lodger if member(s) had total superannuation balance under $1 million.

What are Transfer balance events that are reportable?

The most common type of events that are reportable are:

• Commencement of retirement phase income stream, including reversionary income streams. When you commence a retirement phase superannuation pension, it is reportable. For example, if you commence a retirement phase superannuation pension on 15 September 2023, the event must be included in a TBAR that is lodged by 28 October 2023.
• Commutation or partial commutation of retirement phase income stream. When you cease a retirement phase pension, or partially to pay benefits as a lump sum (rather than pension), it is reportable. For example, if you are partially commuting your pension and paying as a lump sum on 15 September 2023, the event must be included in a TBAR that is lodged by 28 October 2023.

Now that Transfer balance account events are to be lodged quarterly, trustees will need to maintain up to date records to enable to events affecting a member’s Transfer balance account are reported to the ATO on time.

Certain events are required to report even sooner. If a member exceed their personal transfer balance cap:
- a voluntary member commutation of an income stream in response to an ATO Excess transfer balance determination must be reported within 10 business days after the end of the month in which the commutation occurs.
- responses to ATO Commutation authorities must be reported within 60 days of the date the Commutation authority was issued.

The ATO may apply penalties and/or deny income tax exemption on retirement phase pension for not lodging on time or responding to commutation authority.

The ATO states that "An SMSF may be subject to compliance action and penalties if they do not lodge on time or respond to a commissioner commutation authority. Non-compliance with a commutation authority may result in denying exempt current pension income (ECPI) claims."

It is no longer good enough to think about transactions when preparing year-end accounts. For example, passive strategy put in place for withdrawals to be treated as pension until the minimum is met and thereafter allocated as partial commutation (lump sum payment).

Superannuation Accounting Services provides timely accounting reconciliation of transactions so that events affecting a member’s Transfer balance account are reported by the due date.

Do you need help with your situation or if you wish to discuss the above, please contact us. Our contact details.