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  • Transfer balance cap update, four months out

    With only four months to go until self-managed super funds (SMSFs) need to report to us when an ‘event’ occurs that affects a member's transfer balance, we want to update SMSF trustees and professionals about:

    • Excess Transfer Balance (ETB) determinations 
    • tips for completing the Transfer balance account report (TBAR)
    • our online transfer balance account (TBA) information.

    ETB determinations

    In January, we started issuing ETB determinations to SMSF members who had exceeded their transfer balance cap (TBC), and had not commuted the excess by 31 December 2017.

    If an SMSF member receives an ETB determination, their SMSF is likely to need to report information to us before 1 July 2018. For example:

    • if the member chooses to commute an income stream in their SMSF to reduce their excess, the commutation needs to be actioned by their SMSF no later than the due date in the ETB determination. The income stream needs to be reported no later than 10 business days after the end of month in which the commutation occurs
    • if we have issued the ETB determination to the member based on reporting from large super funds, the SMSF may need to report information to us to correct any error in the determination
    • if a member needs more time to respond to an ETB determination, for instance, because their SMSF will need to report to us, they should contact us on 13 10 20. They can request an extension of time before the due date to respond to the ETB determination.

    See also:

    Tips for completing the TBAR

    The TBAR is used to capture information about super amounts moving into and out of retirement-phase accounts. This enables us to record and track an SMSF member’s balance for both TBC and total super balance purposes.

    As at the end of January, approximately 900 SMSFs have voluntarily submitted a TBAR, reporting TBC information for 1,200 SMSF members. We have noticed two problems with some of the forms coming in so far and provide the following tips to help you get it right.

    Tip one: ensure you report the pre-existing income as having an effective date of 30 June 2017. If you don’t do this, some members may be disadvantaged as we will not be able to:

    • apply the transitional rules where an SMSF member exceeded the cap by $100,000 or under, and the excess was rectified by 31 December 2017
    • apply the correct and higher level of debit if the member had a pre-existing income stream and had made structured settlement contributions to their fund before 1 July 2017.

    Tip two: ensure you use the SMSF's ABN otherwise the TBAR will be incorrect.

    See also:

    Our online TBA information

    SMSF members, whose funds have reported their TBA information to us, can now check their TBA information in their myGov account. This information can be downloaded in order to provide it to their trustee, adviser or tax agent.

    We also encourage SMSF members who have a pension or annuity with a large super fund to check their online TBA information.

    SMSF members are encouraged to stay on top of their TBA information so they can make informed decisions and not exceed their TBC, which will mean they have to pay more tax. Remember, the excess transfer tax is calculated from the time of the decision or the event, not the date the event is reported to us.

    See also:

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      Last modified: 01 Mar 2018QC 54688