The SMSF Association has urged the Australian Taxation Office (ATO) to adopt the quarterly reporting approach to the introduction of the Transfer Balance Account Report (TBAR).
Pointing to its submission to the ATO, the SMSF Association said it supported the option that allowed self-managed superannuation funds (SMSFs) 28 days after the end of the relevant quarter to report, with two exceptions, all transfer balance cap events from 1 July 2018.
It noted that 90 per cent of the association members supported this option, suggesting there was general concern from members about SMSF advisers’ ability to cope with all the super changes and increased costs for clients driven by extra reporting requirements.
Currently, the proposed transition period is to 1 July 2020, requiring SMSFs to lodge a TBAR in 10 days after the month the transaction occurs, bringing SMSFs into line with other super sectors.
SMSF Association chief executive, John Maroney, said: “We believe that quarterly reporting will allow for a smoother transition to event-based reporting as trustees and their advisors will have more time to ensure that reporting obligations are met after a relevant transfer balance cap event has occurred”.
“Shifting pension reporting to an event-based approach from the current annual method is a significant change for the superannuation system, especially for SMSFs,” he said.
“It is important that the ATO applies due caution in the design and implementation of TBAR and allows an appropriate transitional period to ensure minimal disruption, with less than half of the respondents to our survey saying they are ready for the introduction of event-based reporting.”
Maroney noted that the industry was currently overwhelmed with the super changes taking effect from 1 July 2017, the introduction of the licensing regime for accountants and the usual ongoing compliance requirements.
The Association also suggest that during the transition period, reporting should be limited to fund members who had a total super balance of more than $1 million to reduce the reporting burden on advisers and trustees. It said this would drastically reduce the number of SMSF members who would be required to comply with TBAR obligations.