Event Based Reporting impacts SMSFs

Event Based Reporting (EBR) is a mechanism which requires certain transactions to be reported to the Australian Taxation Office (ATO) within 28 days after the end of the quarter in which the event occurs.  EBR commences on 1 July 2018.  In some situations, the transaction may be reported annually.

Larger SMSFs are subject to EBR quarterly

EBR will particularly impact SMSFs with members who hold a total superannuation account balance of $1 million or more. From 1 July 2018 those SMSFs that have members with total superannuation account balances of $1 million or more will be required to report events impacting members’ transfer balances within 28 days after the end of the quarter in which the event occurs. SMSFs whose members’ total superannuation balances are less than $1 million can choose to report events which impact their members’ transfer balances at the same time that the SMSF lodges its annual return.

What events must be reported?

Common events include:

  • Income streams a member was receiving just before 1 July 2017 that continue to be paid to them on or after 1 July 2017 and the member is in the retirement phase
  • New retirement phase income streams
  • Cessation of an income stream
  • Pension commutation of retirement phase income streams
  • Structured settlement contributions received after 1 July 2017
  • Certain limited recourse borrowing loan capital repayments that would cause accumulation interests to fall and pension interests to increase.

Importantly if an SMSF member has a pre-existing income stream just before 1 July 2017, that continues to be paid to them on or after 1 July 2017, and the member is in the retirement phase, it must be reported to the ATO via the Transfer Balance Account Report (TBAR) form on or before 1 July 2018.

This new regime has added another regulatory obligation, and SMSF trustees need to be aware they will need to communicate with their fund advisers about their pensions as and when they make changes.