IPA commends ATO's new reporting requirements
The Institute of Public Accountants has welcomed the ATO’s “sensible” final position on the event-based reporting framework for the SMSF sector.
Earlier, the tax office decided that the implementation of SMSF event-based reporting from 1 July 2018 will be limited to SMSF members with total superannuation account balances of $1 million or more.
From 1 July 2018, SMSF members with total superannuation account balances of $1 million or more will be required to report events impacting members’ transfer balances within 28 days after the end of the quarter in which the event occurs.
IPA chief executive Andrew Conway has commended the ATO’s decision to not add administrative burdens to trustees.
“Given the changes that occurred to superannuation that took effect from 1 July 2017, the landing point before reporting becomes mandatory is a sensible position taken by the ATO,” said Mr Conway.
“The $1 million threshold represents an appropriate risk-based approach for the ATO to monitor breaches of the $1.6 transfer cap and is targeted to only impact likely offenders rather than the entire pension balance population.”
“The SMSF industry can breathe a sigh of relief that the reporting will not impact the majority of funds in pension mode. Trustees can also rejoice as unnecessary reporting will not add to administrative burdens eating into their retirement balances,” he added.
“The relief will provide more time for the SMSF industry to adjust to a more contemporary reporting model over time. If a fund has one member in pension mode with a large balance, it will, by default cause the fund to have real-time reporting in place but we believe the industry can live with this scenario compared to all-in approach across all funds.”
The ATO’s verdict means about 85 per cent of the SMSF population will not be required to undertake any additional reporting outside of current annual reporting time frames.