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  • CRT Alert 057/2017

    1st August 2017

    2016 Budget superannuation changes - Implementation update

    Most of the 2016 Budget superannuation changes commenced on Saturday 1 July 2017. In recent weeks we have continued our work with funds to determine how these changes will operate in practice.

    Transfer Balance Account Report (TBAR)

    We published the TBAR specificationExternal Link on 12 May and expect to publish the TBAR legislative instrument by early September. You must begin reporting via the TBAR by 14 December 2017.

    Re-report clarification – Invalid member TFN

    If a member’s tax file number (TFN) is changed by the ATO after you have reported that member’s details via the TBAR you do not need to cancel and re-report this information provided the member’s TFN was valid at the time of lodgment. We will rectify this record on our systems. It is important, however, that you lodge new records with the member’s new TFN.

    If the member has not provided you with a TFN or you have determined the TFN they provided is invalid, you should zero-fill this field.

    If you’re unsure whether a TFN is valid, you should report it anyway. If it is later established that the member’s TFN is invalid we will contact you if you need to cancel the TBAR report for the member and provide a new TBAR report.

    We will soon update the electronic report specifications (ERS) with a note clarifying these situations.

    Reporting clarification – Reporting when an income stream stops being in the retirement phase

    There has been uncertainty around whether funds need to report when an income streams stops being in the retirement phase – for example due to the death of member.

    When an income stream ceases to be in the retirement phase because you have failed to comply with the rules or standards under which it is provided, you should use the ‘STO’ (Income stream stops being in the retirement phase) event type in the TBAR.

    When an income stream ceases because of the member’s death, you do not need to report to us vie the TBAR. However, if the member’s death results in a reversionary income stream becoming payable to a beneficiary, this is a separate credit event and should be reported via the TBAR.

    These details are set out in the TBAR guidance notesExternal Link.

    TFN withholding declaration form

    If you need a TFN declaration from a member in relation to a capped defined benefit income stream they may use the tax file number declaration (NAT 3092) while the form is being updated. We are updating our scripting and web content to support this.

    The form will be updated by November 2017.

    Death benefit rollovers

    We’re updating the instructions for the death benefit rollover statement to clarify some aspects.

    When Section D is being completed for a child beneficiary, the value of the super interests at the time of death includes any investment earnings that accrued to the deceased member’s interest between the date of death and the date the dependent child is entitled to be paid the death benefit income stream. This does not include earnings for an amount paid under a life insurance policy or an amount arising from self-insurance.

    The amount reported at Section D need not equal the rollover amount reported at item 16 in section C. For example, if the deceased member has a retirement phase interest of $100,000, of which the dependent child’s share is 70%, the rollover amount will be $70,000 while the amount reported at item 18 in Section D would be a retirement phase value of $100,000 with 70% of this amount for this dependent beneficiary.

    Personal superannuation contributions deduction

    Your members can use the notice of intent to claim or vary a deduction for personal super contributions (NAT 71121) to notify you that they will be making a claim for this tax deduction. We have updated the Instrument of approval for the notice of intent to claim or vary a deduction for personal superannuation contributions to remove the instructions. We have not changed the notice of intent form (NAT 71121) but have updated the instructions to remove references to the now-removed 10% maximum earning condition.

    You can also develop your own paper or virtual formExternal Link. While you are not obliged to use our instructions, we do recommend using them if your members are going to use our paper form NAT 71121.

    Capital gains tax relief

    We have published a new question in our FAQs on CGT relief about an acceptable method to determine the market value of a relevant fund asset for the purposes of the cost base reset.

    We are reviewing some of our law companion guidelines and will publish updates soon, including LCG 2016/8 Transfer balance cap and transition to retirement reforms: transitional CGT relief for superannuation funds.

    Innovative retirement income streams – cross-agency process

    A new streamlined engagement process is available to superannuation funds and life insurance companies. The cross-agency process is available to support product providers during their development of new innovative retirement income stream products. This cross-agency process will help them seek information and feedback from APRA, ASIC, ATO and DSS via a single entry point about the legal and regulatory requirements of these new products. The ATO has responsibility for the coordination of the cross-agency process.

      Last modified: 01 Aug 2017QC 53019