SMSFs have a range of reporting requirements, one of which changes to members transfer balances. A member’s transfer balance is the total amount of superannuation benefits in retirement (pension) phase.
Where a member’s transfer balance is over $1m reporting is required to be undertaken in real time. The value is the sum of the member’s total individual superannuation balances. Total superannuation balance refers to the total amount of funds in superannuation for an individual which may be across more than one fund and partly in retirement phase and partly accumulation.
Events that will impact balances & must be reported to the ATO include:
- The commencement date and start value of retirement phase superannuation income streams on or after 1 July 2017.
- Member commutations from a retirement phase income stream.
- The commencement of a death benefit income stream.
- Personal injury contributions from 1 July 2017.
- Limited recourse borrowing arrangement (LBRA).
- An income stream stops being in the retirement phase.
Reports are generally required to be lodged no later than 10 days after the end of the month in which the event occurred, or a later date at the ATO allows. Penalties may apply for failure to report on time and in the prescribed form.
This requirement has important timing and taxation implications for individuals considering retirement where their member balance is over $1m. The flexibility to retrospectively retire during the course of the year is no longer an option for these individuals.
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This information is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Financial Planning activities only are provided by Integrity One Planning Services Pty Ltd as a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 AFSL 225051. Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. Please consult your adviser, finance specialist, broker, and/or accountant before making decisions using this information.