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  • Event-based reporting case studies

    These case studies will help you understand:

    • when you need to report an event to us if a member has not exceeded their personal transfer balance cap
    • when you need to report an event to us if a member has exceeded their personal transfer balance cap and been sent an excess transfer balance determination and the possible impacts of failing to do so
    • how the timing of when you report may impact members after the general transfer balance cap is indexed.

    In these case studies, all income streams are in retirement phase.

    Table 4: When you need to report an event if a member has not exceeded their personal transfer balance cap

    Fund scenario

    Member scenario

    Reporting requirement

    Obligation to report an event no later than 28 days after the end of the quarter for a single member fund

    On 30 June 2018, Mary has a super balance of $1.2 million.

    On 20 September 2018, she starts an income stream valued at $1.2 million and has no other super interests.

    Over time the value of the income stream decreases to $800,000.

    On 3 March 2019, Mary commutes $100,000 from the income stream.

    As Mary had a total super balance of $1 million or more as at 30 June 2018, the SMSF is required to report these events no later than 28 days after the end of the quarter in which they occur.

    The start of the income stream would need to be reported to us no later than 28 October 2018.

    The commutation would need to be reported to us no later than 28 April 2019.

    Obligation to report an event no later than 28 days after the end of the quarter for all fund members

    Fiona and Jimmy are members of an SMSF.

    Fiona has a total super balance at 30 June 2019 of $500,000 and starts an income stream valued at $500,000 on 1 July 2019.

    Jimmy has a total super balance at 30 June 2019 of $2 million, made up of $500,000 in the SMSF and $1.5 million in an APRA super fund.

    All of Jimmy’s interests are in accumulation phase.

    Jimmy starts an income stream in the SMSF valued at $100,000 on 17 January 2020.

    As Jimmy had a total super balance of $1 million or more as at 30 June 2019, the SMSF is required to report these events no later than 28 days after the end of the quarter in which they occur.

    The start of Fiona's income stream must be reported to us no later than 28 October 2019.

    The start of Jimmy's income stream must be reported to us no later than 28 April 2020.

    Obligation to report events to us no later than the self-managed superannuation annual return (SAR) for the year in which the event occurred.

    Gary has a total super balance of $900,000 as at 30 June 2018.

    Gary starts two income streams valued at $500,000 and $400,000 respectively in his SMSF on 1 July 2018.

    Gary continues to make contributions and, as at 30 June 2020, his total super balance is $1.1 million.

    On 1 July 2020, he commutes the two income streams and starts a new income stream valued at $1.1 million.

    As Gary has a total super balance of less than $1 million at 30 June 2018, the SMSF must report events that occur in a year in line with their SAR for that year.

    They can choose to report earlier.

    This requirement does not change even though his total super balance increases over time.

    Gary's SMSF would need to report the two credits arising on 1 July 2018 no later than due date of the fund's annual return for the 2018-19 year, generally 15 May 2020.

    The following events would need to be individually reported to us no later than the due date of the fund's SAR for 2020–21, generally 15 May 2022:

    • each debit resulting from the commutation of the two pre-existing income streams
    • credit arising from the new income stream.
    Table 5: When you need to report an event to us if the member has exceeded their personal transfer balance cap and been sent an excess transfer balance determination 

    Fund scenario

    Member scenario

    Reporting requirement

    Incomplete reporting from the SMSF has resulted in an excess transfer balance determination issuing to the member.

    In 2018, Tan started a pension valued at $800,000 in her SMSF.

    On 20 October 2020, Tan commuted her pension in the SMSF and started a pension in an APRA fund on 22 October 2020.

    When Tan commuted her pension before rolling it over, the value of the pension had increased to $850,000.

    Tan's SMSF had previously reported to us the $800,000 credit in her transfer balance account.

    Tan's APRA fund reports to us the $850,000 credit in her transfer balance account before the SMSF reports the debit.

    On 25 October 2020, we determine Tan has exceeded her personal transfer balance cap.

    We send Tan an excess transfer balance determination.

    Tan's SMSF must report to us as soon as possible the $850,000 debit that occurred when they commuted the pension.

    The SMSF must also ensure they report that the pension account is closed.

    Tan's SMSF reports the debit to us on 25 November 2020.

    We revoke the excess transfer balance determination we have sent Tan.

    If Tan's SMSF does not report the debit to us before the due datein the determination, we may send Tan's APRA fund a commutation authority.

    This means, Tan is at risk of having her pension commuted in full.

    Reporting a member commutation after the member has received an excess transfer balance determination

    Simon started a pension in his SMSF valued at $1.3 million on 1 July 2017.

    On 30 June 2019, Simon commuted the pension in full. When Simon commuted the pension, it was valued at $1.1 million

    On 1 July 2019 Simon started a new pension valued at $1.4 million

    Simon's SMSF had previously reported the $1.3 million credit and $1.1 million debit in his transfer balance account.

    Simon's SMSF lodged a TBAR on 28 October 2019 reporting the 1 July credit of $1.4 million.

    On 29 October 2019 we determine Simon exceeded his transfer balance cap on 1 July 2019.

    We send him an excess transfer balance determination requiring him to commute the excess and the excess transfer balance earnings by 28 December 2019.

    Simon does so on 12 December 2019.

    If Simon's SMSF does not report this commutation to us by 13 January 2020, we may send the SMSF a commutation authority.

    Table 6: How the timing of when you report may impact your members after the general transfer balance cap is indexed

    Fund scenario

    Member scenario

    Member impact

    Reporting an event that occurred in 2020-2021 when the SAR for the year is lodged

    Len is a member of an SMSF that reports routine transfer balance account events in line with the SAR.

    Len started a pension on 1 July 2018 valued at $640,000.

    The SMSF reported that event to us when they lodged their SAR for the 2018-2019 year.

    Len started another pension on 1 July 2020 valued at $300,000 after making a downsizer contribution.

    The SMSF will report this to us when they lodge their SAR for the 2020-2021 year on 15 May 2022.

    When we initially calculate Len’s personal transfer balance cap, the only event reported to and processed by us, will be the pension Len started on 1 July 2018.

    Accordingly, the personal transfer balance cap, we will initially calculate as applying from 1 July 2021 will be $1.66 million. This is what will be displayed in ATO online.

    In May 2022, when the pre-indexation credit is reported to us, the highest ever balance in Lens’s transfer balance account between 1 July 2017 and 30 June 2021 will increase to $940,000.

    We will recalculate Len’s personal transfer balance cap, which applied from 1 July 2021 based on this information.

    Len’s personal transfer balance cap from 1 July 2021 will be reduced to $1.64 million.

    Not reporting a roll over commutation promptly

    Dev started a pension in his SMSF on 1 July 2018 with a value of $800,000.

    On 30 March 2021, Dev commutes the pension in full. This results in a debit of $760,000.

    Dev starts a pension in an APRA fund of the same value on 3 April 2021.

    The APRA fund reports this credit to us on 13 April 2021.

    The SMSF has not reported the commutation debit to us before 1 July 2021.

    Based on the information reported to us, on 1 July 2021, the highest ever balance of Dev’s transfer balance account will be $1.56 million.

    We will initially calculate Dev’s personal transfer balance cap from 1 July 2021 as $1.6 million.

    When the SMSF reports the commutation debit of $760,000 to us, the highest ever balance of Dev’s transfer balance account prior to 1 July 2021 will reduce to $800,000.

    We will recalculate Dev’s personal transfer balance cap from 1 July 2021 as $1.65 million.

    We apply this to Dev’s affairs from that date.

    Impact of falling being in your TBAR reporting

    Joan is a member of an SMSF, that reported the $1.4 million credit arising in her transfer balance account when she started a pension on 1 July 2019.

    Joan’s SMSF should be reporting most events to us no later than 28 days after the end of the quarter in which they occur.

    However, she has fallen behind in her obligations and no other events have been reported to us by July 2021.

    Joan has been “rolling back” her pension, “topping it up” and starting a new one each year.

    Joan commuted the pension in full on 30 June 2020, creating a debit of $1.35 million.

    She then started a new pension valued at $1.55 million on 1 July 2020.

    On 30 June 2021, Joan commutes the pension creating a debit of $1.52 million and started a new pension valued at $1.35 million on 1 July 2021.

    This makes the balance of her transfer balance account on 1 July 2021 $1.61 million.

    Based on the reporting received, we'll initially calculate Joan’s personal transfer balance cap as $1.61 million and display this in her ATO online account.

    Joan’s SMSF reports all outstanding events to us when the SMSF lodges the two SARs in May 2023.

    When this occurs, we'll recalculate Joan’s personal transfer balance cap from 1 July 2021 as $1.6 million and determine Joan exceeded her personal transfer balance cap on that day.

    Joan will need to commute the $10,000 plus the excess transfer balance earnings that have accrued between 1 July 2021 and May 2023 when the Commissioner makes the excess transfer balance determination.

    Joan will also need to pay excess transfer balance tax on the earnings that accrue between 1 July 2021 and when the excess is rectified.

    See also:

    Last modified: 13 May 2021QC 57304