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ATO warns of TBAR lodgement errors

With upcoming annual lodgement dates for Transfer Balance Account Reporting (TBAR), the ATO is alerting funds of common lodgement mistakes that could lead to delays and additional processing time.

The Transfer Balance Cap (TBC) is a $1.6 million cap on the total amount of superannuation benefits that a member can transfer into a tax-free retirement phase income stream. TBAR is used by SMSF trustees to report to the ATO any events that affect a member’s transfer balance. The information is used to record and track the member’s TBC and apply provisions if the member were to breach the cap.

Reports can be lodged both online or by paper forms. The electronic method is recommended by the ATO as human errors are common when using the paper form to report. These issues are often a failure to provide the fund’s ABN and failing to report the event type. When these errors occur, the form will be suspended for manual review and the ATO may need to contact funds in some cases to resolve any issues.

A TBAR must be lodged for the 2018-19 financial year if any member had a transfer balance account event occur in the last year, and if all members have a total super balance of $1 million. The due date for annual TBAR reporting is the same date as the SMSF annual return on 15 May 2019, although not all funds have the same lodgement due date. Trustees should familiarise themselves with their SMSF’s due dates and ensure they are reporting the correct information to avoid processing delays.

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Basics of SMSF investing

January 21, 2021

Setting up an SMSF fund is the simplest step. Establishing a fund which delivers you consistent returns from your investments is much more difficult.

Investing successfully involves determining precise goals and picking investments which will effectively achieve those goals. The advantage of SMSFs is that you can build a portfolio which reflects your short-term and long-term goals in response to changing market conditions.

In an SMSF fund, your investment options are:

Before you begin investing, consider what might be the best way to diversify your portfolio. How you portion your investments will depend on your funds, the market, and your goals. Regardless of what your plan is, diversification should be a priority.

Choosing an SMSF as opposed to an industry or retail super fund provides you with more flexibility, but also with more responsibility. Researching before investing is key if you want the best out of your SMSF.