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Transfer Balance Account Report (TBAR) – New Event-Based Reporting Framework


Definitions and New Superannuation Terminologies

 
 
What is the Transfer Balance Cap (TBC)?

From 01 July 2017, the Government introduced a $1.6 million cap on the total amount of superannuation benefits that you can transfer into a tax-free Retirement Phase Pension Income Stream. This limit is known as the Transfer Balance Cap (TBC). For more information on the Transfer Balance Cap, please click here.

 
 
What is a Retirement Phase Pension Income Stream?

Only pension accounts that are in the Retirement Phase count towards the Transfer Balance Cap. The following types of Pension Income Streams are considered as Retirement Phase Pension Income Streams:

Accumulation, and Transition to Retirement Income Stream / Pension (TRIS) where the member is under 65 and still working are NOT in the Retirement Phase and therefore are not affected by the Transfer Balance Cap.

 
 
What is the Transfer Balance Account?

The Transfer Balance Account is the account that the Australian Taxation Office (ATO) uses to track the transactions and amounts in your retirement phase across all Superfunds.

It operates similarly as a bank account in a sense that certain transactions give credits and debits to its balance. The balance in the Transfer Balance Account is calculated as the sum of credits less the sum of debits in the account.

Your Transfer Balance Account commences on either:

  • 01 July 2017, if you were already receiving a Retirement Phase Pension Income Stream on 30 June 2017; or
  • the day you first receive a Retirement Phase Pension Income Stream.

 
 
Excess Transfer Balance

If the balance of your Transfer Balance Account exceeded your Transfer Balance Cap, you would have breached the Transfer Balance Cap and have an Excess Transfer Balance.

The ATO will estimate the notional earnings on your Excess Transfer Balance and require you to remove the excess (including notional earnings) from the retirement phase account. You will also be liable to pay tax on the notional earnings attributable to the excess capital.

For more information on how the notional earnings are calculated by the ATO, please click here.

 
 
Excess Transfer Balance Determination

When you have an Excess Transfer Balance, the ATO will issue an Excess Transfer Balance Determination which states the amount that needs to be removed from the retirement phase to bring your Transfer Balance Account back in line with your Transfer Balance Cap. This amount includes the notional earnings on the excess. The amount can be transferred into the Accumulation Account or withdrawn from your SMSF.

 
 
Commutation Authority

If no response has been made within 60 days after an Excess Transfer Balance Determination was issued, the ATO will issue a Commutation Authority requesting the amount to be commuted.

Commutations usually occur in the following situations:

  • When you make lump sum withdrawals (i.e. not pension withdrawals) from your Retirement Phase Pension Income Stream.
  • When you transfer your member balance from your Retirement Phase Pension Income Stream Pension back into the Accumulation Account of your SMSF.
  • When you roll out your member balance from your Retirement Phase Pension Income Stream to another superannuation provider.

If you failed to comply with the Commutation Authority within 60 days after the Commutation Authority was issued, your Pension would be taken to have ceased at the start of that Financial Year as required by the superannuation legislation. As a result, you will lose the tax exemption benefits on your share of the SMSF earnings.


Transfer Balance Account Report (TBAR) – The New Event-Based Reporting Framework

 
 
What is the Transfer Balance Account Report (TBAR)?

Due to this new Transfer Balance Cap measure, the ATO has imposed a new reporting obligation on SMSF Trustees so as to record and track the movements in the member’s Transfer Balance Cap and apply provisions should the member breach the Transfer Balance Cap (TBC). This new event-based reporting framework is called the Transfer Balance Account Report (TBAR). It is a separate form from the SMSF Annual Return.

 
 
Who should complete the Transfer Balance Account Report (TBAR)?

If your SMSF has a member who is accessing a Retirement Phase Pension Income Stream, you will be required to comply with the new Transfer Balance Account Report (TBAR) framework.

The following types of Pension Income Streams are considered as Retirement Phase Pension Income Streams:

Accumulation, and Transition to Retirement Income Stream / Pension (TRIS) where the member is under 65 and still working are NOT in the Retirement Phase and therefore are not required to comply with the Transfer Balance Account Report (TBAR) Framework.

 
 
What events need to be reported under TBAR?

The following table details the events that affect the balance in the member’s Transfer Balance Account and whether the event needs to be reported to the ATO under the TBAR framework:

Reportable Events:
Event Type Impact on the Transfer Balance Account Required by TBAR (Yes / No)
You had a current Retirement Phase Pension Income Stream on 01 July 2017 that existed before 01 July 2017 Credit Yes
You commenced a new Retirement Phase Pension Income Stream after 01 July 2017 Credit Yes
You made lump sum withdrawals (i.e. not pension withdrawals) from your Retirement Phase Pension Income Stream after 01 July 2017 Debit Yes
You transferred your member balance from your Retirement Phase Pension Income Stream back into the Accumulation Account of the SMSF, known as Rollback after 01 July 2017 Debit Yes
You rolled out your member balance from your Retirement Phase Pension Income Stream to another superannuation provider after 01 July 2017 Debit Yes
You failed to withdraw the minimum pension before 30 June and were required by law to cease the Retirement Phase Pension Income Stream at the start of that Financial Year Debit Yes
You responded to an Excess Transfer Balance Determination issued by the ATO since you exceeded your Transfer Balance Cap Debit Yes
You responded to a Commutation Authority issued by the ATO since you failed to respond to the Excess Transfer Balance Determination within 60 days of its issue date Debit Yes
Structured settlement contributions made after 1 July 2007 Debit Yes
Non-Reportable Events:
Event Impact on the Transfer Balance Account Required by TBAR (Yes / No)
Notional earnings on the Excess Transfer Balance Credit No – Calculated by the ATO directly
Death of a Member Debit No – ATO collects this information via other sources
Other Special Events. E.g. Debit No – Trustees need to report this information to the ATO separately using the Transfer Balance Event Notification Form
Investment earnings and losses on your superannuation interests No impact No – No impact on the Transfer Balance Account
Pension amounts paid to you No impact No – No impact on the Transfer Balance Account

For a full list of the events that must be reported to the ATO, please visit the ATO website here.

An Example:

Barney commenced an SABP with $1.2 million on 01 October 2017. He made a pension withdrawal of $250,000 on 01 February 2018. The balance in the pension account increased to $1 million on 30 June 2018 due to investment earnings. Barney then decided to make a lump sum withdrawal of $100,000 from the SABP on 30 June 2018.

Reportable Events

The events that need to be reported by Barney are the commencement of his SABP of $1.2 million and the lump sum withdrawal of $100,000. The pension withdrawals and earnings do not affect his balance in the Transfer Balance Account and therefore are not required to be reported.

Transfer Balance Account

His Transfer Balance Account is credited with the pension commencement amount of $1.2 million and then debited with the commutation amount (lump sum withdrawal) of $100,000, resulting in a transfer balance of $1.1 million.

 
 
Reporting Frequency and Due Date

The reporting frequency under the TBAR Framework is generally determined by the Total Superannuation Balances (TSB) of all members of your SMSF, except for three special events where the ATO has set a tighter reporting time frame.

Report Sooner – Three Special Events

The following three events are required to be reported to the ATO within the specified time frame and the reporting due date is not affected by the Total Superannuation Balances (TSB) of the SMSF members:

Event Reporting Due Date
You had a current Retirement Phase Pension Income Stream on 1 July 2017 that existed before 1 July 2017 On or before 01 July 2018
You responded to an Excess Transfer Balance Determination issued by the ATO since you exceeded your Transfer Balance Cap 10 business days after the end of the month in which the Excess Transfer Balance is removed
You responded to a Commutation Authority issued by the ATO since you failed to respond to the Excess Transfer Balance Determination within 60 days of its issue date 60 days from the date the Commutation Authority was issued by the ATO
Depends on the TSB – All Other Events

For all the other events, the reporting frequency and due date are determined by the Total Superannuation Balances (TSB) of all members of your SMSF at the later of:

  • 30 June 2017 if a member had a pre-existing Retirement Phase Pension Income Stream (i.e. before 30 June 2017) or where the SMSF first had a member who started their first Retirement Phase Pension Income Stream during the 2017/2018 Financial Year;
  • 30 June of the Financial Year immediately before the SMSF first has a member who starts their first Retirement Phase Pension Income Stream.

If at least one member of the SMSF has a Total Superannuation Balance of more than $1 million, the Transfer Balance Account events for all members of the SMSF must be reported within 28 days after the end of the quarter in which the event occurs (i.e. Quarterly Reporting).

If all members of the SMSF have a Total Superannuation Balance of less than $1 million, the events can be reported annually no later than the due date for lodging the SMSF’s annual return (i.e. Annual Reporting).

Importantly, once the reporting frequency is set, it will not change even if the Total Superannuation Balances of the members change to above or below $1 million in the future.

Example 1:

Barney and his spouse, Lisa are members of an SMSF. Barney and Lisa had a Total Superannuation Balance of $1.2 million and $500,000 respectively as at 30 June 2018. Lisa retires on 01 December 2018 and decides to commence a Simple Account Based Pension on the same day. Barney is still working and does not commence a Pension.

Lisa will start to have a Transfer Balance Account on 01 December 2018, which is the day she first starts to have a Retirement Phase Pension Income Stream. The reporting frequency in this case is determined by members’ Total Superannuation Balances on the previous 30 June. Given that Barney’s TSB as at 30 June 2018 exceeded $1 million, the SMSF is required to adopt the Quarterly Reporting. Accordingly, Lisa is required to report the commencement of her pension by 28 January 2019 (i.e. 28 days after the end of the quarter in which the SABP commences).

Example 2:

Barney is the sole member of his SMSF and he commenced a Simple Account Based Pension in the SMSF in the 2016 Financial Year. His Total Superannuation Balance as at 30 June 2017 was $900,000. Given that he had a Retirement Phase Pension Income Stream before 30 June 2017, the reporting frequency is determined based on his Total Superannuation Balance as at 30 June 2017. Barney is eligible for Annual Reporting.

Barney’s Total Superannuation Balance increases to $1.1 million on 01 September 2018 due to investment earnings and he makes a lump sum withdrawal of $150,000 from Simple Account Based Pension on the same day. Since the reporting frequency does not change once it’s set, even if Barney’s TSB exceeds $1 million, he can still report the lump sum withdrawal of $150,000 by the due date for lodging his SMSF’s 2019 Annual Return.

How to view your Total Superannuation Balance?

A member's Total Superannuation Balance is essentially the sum of all their accumulation and retirement phase superannuation interests across all Superfunds.

If all your superannuation interests are invested in the SMSF(s) administered by ESUPERFUND, your Total Superannuation Balance will be calculated by ESUPERFUND as part of the Annual Return Process. You can view your member balance via your Client Portal here once the Annual Return for the previous Financial Year has been prepared.

If you have superannuation interests invested in other Superfunds, you will need to contact these Super Providers individually to confirm your member balance as at 30 June.

We also advise that you can view your Total Superannuation Balance using the ATO online services through myGov. Alternatively, you may contact the ATO on 13 10 20 directly.

Summary

The following table summarises the reporting due dates for different Transfer Balance Account events discussed above:

Event Types All Members have TSB of Less than $1 million At Least One Member has TSB of More than $1 million
Pre-existing Retirement Phase Pension Income Stream (commenced before 01 July 2017) On or before 01 July 2018
Respond to an Excess Transfer Balance Determination issued by the ATO since you exceeded your Transfer Balance Cap 10 business days after the end of the month in which the Excess Transfer Balance is removed
Respond to a Commutation Authority since you failed to respond to the Excess Transfer Balance Determination within 60 days of its issue date 60 days from the date the Commutation Authority was issued by the ATO
New Retirement Phase Pension Income Stream commenced between 01 July 2017 and 30 June 2018 No later than the due date for lodging the SMSF's Annual Return for the 2018 Financial Year 28 October 2018
Lump sum / roll-back / roll-out made between 01 July 2017 and 30 June 2018
New Retirement Phase Pension Income Stream commenced on or after 01 July 2018 No later than the due date for lodging the SMSF's annual return for the Financial Year in which the event occurs 28 days after the end of the quarter in which the event occurs
Lump sum / roll-back / roll-out made on or after 01 July 2018

Reporting Attended by ESUPERFUND

We are pleased to advise that ESUPERFUND attends to the preparation and submission of the TBAR on your behalf at no additional cost! This is unprecedented in today's market!

In order to collect information from you, please click here to visit the Client Portal – TBAR page and follow the steps detailed below to provide information to our office.

 
 
Step One: Select the Reporting Frequency (i.e. Annually / Quarterly)

We advise that if based on ESUPERFUND’s available data, your SMSF must lodge TBAR quarterly, the frequency has been set to ‘Quarterly’ and you cannot change the reporting frequency. Please proceed to Step Two directly.

Otherwise, ‘Annually’ is selected as the default option for your SMSF. However, if your SMSF meets all the quarterly reporting criteria explained in the above section, you should change the reporting frequency to ‘Quarterly’.

 
 
Step Two: Complete the Action Required Item(s) before the Reporting Due Date If Applicable

The TBAR Summary table details all the TBAR events that are already known to ESUPERFUND (e.g. the commencement of new Retirement Phase Pensions after 01 July 2017).

For some events, we only have data for the event date while the event amount is unknown. This is because additional information is required from you to enable us to calculate the amount. These items have been marked as ‘Action Required’. Please click the ‘Action Required’ link and follow the instructions accordingly to provide the additional information to our office.

If there are no ‘Action Required’ Items, please proceed to Step Three directly.

 
 
Step Three: Add Reportable Events before the Reporting Due Date If Applicable

If apart from the listed events, there are other reportable events (see below), please click the button, complete all fields and then click ‘Submit’.

  • Lump sum withdrawals (i.e. not pension withdrawals) made from the member’s Retirement Phase Pension after 01 July 2017.
  • Member Balance rolled out from the member’s Retirement Phase Pension to another superannuation provider after 01 July 2017.
  • Responding to an Excess Transfer Balance Determination issued by the ATO since the member exceeded the Transfer Balance Cap.
  • Responding to a Commutation Authority issued by the ATO since the member failed to respond to the Excess Transfer Balance Determination within 60 days of its issue date.

Reporting Timeframe

 
 
Pre-existing Retirement Phase Pension Income Stream

If you have a pre-existing Retirement Phase Pension Income Stream that existed before 01 July 2017, the first reportable event is the balance of the Pension as at 30 June 2017 and the reporting due date is 30 June 2018.

ESUPERFUND has reported this event to the ATO before 30 June 2018 if your Fund’s 2017 Annual Return has been completed. You should have received a notification message in your Client Portal Inbox.

 
 
If You Have Been Issued an Excess Transfer Balance Determination / Commutation Authority

If the ATO has issued an Excess Transfer Balance Determination, please remove the Excess Transfer Balance as soon as possible. Remember that you are required to report this event to the ATO 10 business days after the end of the month in which the Excess Transfer Balance is removed.

If the ATO has issued a Commutation Authority, please remove the Excess Transfer Balance as soon as possible. Remember that you are required to report this event to the ATO within 60 days from the date of issue.

Due to the tight time frame set by the ATO, you should provide information to ESUPERUND via the Client Portal – TBAR page immediately after you have responded to the ATO’s Excess Transfer Balance Determination / Commutation Authority and attach the ATO’s letter.

 
 
All Other Events Occurred after 01 July 2017

If your SMSF needs to lodge a TBAR annually, you must provide information to ESUPERFUND via the Client Portal – TBAR page no later than the due date for lodging the SMSF's annual return for the Financial Year in which the event occurs.

If your SMSF needs to lodge a TBAR quarterly, you must provide information to ESUPERFUND via the Client Portal – TBAR page within 28 days after the end of the quarter in which the event occurs.

How to view your Transfer Balance Account Balance after Lodgement by ESUPERFUND?

ESUPERFUND submits TBARs to the ATO via the Bulk Data Exchange (BDE) channel, which is generated electronically by our system and transferred to the ATO directly. You will receive a notification in your Client Portal Inbox after we have lodged any events.

We caution that if you have already reported the same event to the ATO by yourself, please contact ESUPERFUND via the Client Portal Inbox immediately. We will then contact the ATO to cancel the event reported by ESUPERFUND to avoid double reporting.

Please allow for at least 28 business days for the ATO to update the information in their system. After this period, you can view your Transfer Balance Account Balance using the ATO online services through myGov or contact the ATO on 13 10 20 directly.

Events that ESUPERFUND Cannot Report on Your Behalf

We advise that ESUPERFUND can report most of the events to the ATO via TBAR on your behalf, except for the following two situations:

Retirement Phase Pension Income Stream with another Super Provider

We advise that ESUPERFUND only attends to TBAR for Retirement Phase Pension Income Streams established by us. If you have a Pension (e.g. Defined Benefit Pension) with another Superfund, please contact them directly.

We advise that the following events should be reported by the Trustees to the ATO directly using the Transfer Balance Event Notification Form. It is a separate form from the TBAR, therefore ESUPERFUND is unable to complete this Form on your behalf.

  • If you have a Retirement Phase Pension Income Stream, but received a payment for a personal injury and made a structured settlement contribution to your SMSF before 1 July 2007.
  • A family law payment split occurred on or after 1 July 2017.
  • The value of your Retirement Phase Pension Income Stream was reduced on or after 1 July 2017 because of an act of fraud or dishonesty and the offender was convicted.
  • The value of your Retirement Phase Pension Income Stream was reduced on or after 1 July 2017 because some or all the assets supporting your Retirement Phase Pension Income Stream were made available to your Trustee in bankruptcy.