The Australian Taxation Office may give self-managed super fund trustees some relief from new event-based reporting requirements, if only temporarily.
One of several options outlined in a position paper issued by the ATO last week would allow SMSFs to report quarterly, instead of when events occur.
A quarterly reporting regime would apply for SMSFs until 2020, when they would have to comply with the same reporting obligations as other types of super funds.
The new event-based reporting requirements are a by-product of the transfer balance cap rules introduced in July. All superannuation providers, including SMSFs, will be required to report data relating to transactions associated with the payment of retirement phase income streams to the ATO on an event basis.
“This reporting is required in order for us to track an individual’s transfer balance account across all funds and administer the appropriate consequences if an individual exceeds their cap,” the ATO says in the position paper.
“Events” that need to be reported include commencement of superannuation income streams (pensions), limited recourse borrowing arrangement repayments, commutations, compliance with a commutation authority issued by the ATO, personal injury contributions and superannuation income streams that stop being in the retirement phase.
Reporting starts on October 1. Reports are to be lodged no later than 10 business days after the end of the month in which the reporting event occurred.
Concessions that may be offered to SMSFs include giving them until July next year to start reporting and allowing them to report the commencement of a retirement income stream or an LRBA payment 28 days after the end of the relevant quarter.
No concession will be available when it comes to reporting compliance or non-compliance with commutation authorities.
And in cases where an income stream is commuted because the ATO issued an excess transfer balance determination, the ATO is unlikely to offer quarterly reporting.
The move to event-based reporting for SMSFs has been controversial. The Tax Institute has criticised it, saying it will put a lot of pressure on tax agents and trustees.
“Superannuation reporting requirements should be annual. At worst, reporting should be no more frequent that quarterly,” the Institute says.
The SMSF Association has welcomed the quarterly option in the ATO position paper.
SMSF Association chief executive John Maroney says his organisation is surveying members to see what the overall response is to the ATO position paper.
“This will inform our final position and submission to the ATO,” Maroney says.
“The transition period will allow the SMSF sector to develop and adopt technology that will assist advisers meet the compliance challenge of event-base reporting. Currently we do not have a position on how frequently event-based reporting should occur after the transition period finishes.
“We do believe that in the long term event-based reporting will be a positive for the SMSF sector as it can drive efficiencies with the use of technology.”