From 1 July 2018, as a result of the 2017 super reforms, the trustee(s) of a self-managed super fund (SMSF) must lodge with the Australian Tax Office (ATO) a Transfer Balance Account Report (TBAR) where a transfer balance account event occurs in respect of a member. The ATO uses this information to record and track a member’s transfer balance account and total superannuation balance.

A member’s ‘transfer balance account’[1] must be reported in a range of circumstances, including but not limited to the following:

  • where a pre-existing super income stream continues to be paid to a member on or after 1 July 2017, and is in retirement phase on or after 1 July 2017
  • where, after 1 July 2017:
    • a member commences a retirement phase income stream
    • a member commutes a retirement phase income stream
    • a member’s pension is commuted to comply with a commutation authority issued by the Commissioner of Taxation.

Although the SMSF trustee is not required to lodge a TBAR until after 1 July 2018, the trustee must ensure that events affecting a member’s transfer balance account – which occur between 1 July 2017 and 30 June 2018 – are also reported in the TBAR at the time the SMSF’s first TBAR is due.

How to report

To lodge a TBAR, a separate form must be lodged in respect of each member and must be in the form prescribed by the ATO. An online form is available to SMSF trustees on the ATO’s website here.

Reporting timeframes

Generally, the deadline by which the TBAR must be lodged depends on the ‘total superannuation balance’[2] of a fund’s members:

  • if all members of the SMSF have a total superannuation balance of less than $1million – the fund must report the event no later than when its annual return is due
  • if any member has a total superannuation balance of $1million or more – the fund must report the event within 28 days after the end of the quarter in which the event occurs.

If a commutation is effected as the result of:

  • a commutation authority – the TBAR must be lodged no later than 60 days after the issue of the commutation authority
  • an excess transfer balance determination – the TBAR must be lodged within 10 business days after the end of the month in which the commutation occurred.

An SMSF may report events earlier than the above timeframes and the ATO encourages this in order to avoid the issue of an excess transfer balance determination, where the member would otherwise be on record as having exceeded their transfer balance cap.

Failing to report within timeframe

Where the SMSF trustee fails to report the transfer balance account event within the required timeframe, a member’s transfer balance account may be affected and the member penalised and subject to compliance action.