What is the Transfer Balance Account Report (TBAR)

The Transfer Balance Account Report (TBAR) is an important superannuation reporting obligation designed to track members’ retirement phase superannuation balances and ensure compliance with the Transfer Balance Cap (TBC).

From 1 July 2017, the TBAR regime has helped the Australian Taxation Office (ATO) monitor amounts transferred into the tax-free retirement phase of superannuation, preventing excess balances that could lead to additional taxes.

Lodgement Requirements from 1 July 2023

Lodgement Requirements from 1 July 2023

A key recent update to TBAR compliance is the mandatory quarterly lodgement for all SMSFs starting 1 July 2023. Previously, SMSFs with members holding a total superannuation balance (TSB) under $1 million could report TBAR events annually. This threshold has been removed, and as of the 2023-24 financial year, every SMSF must lodge transfer balance account events within 28 days after the end of the relevant quarter. This quarterly timing applies to reportable events occurring in each quarter, with dates typically being 28 January, 28 April, 28 July, and 28 October.

Importantly, all unreported TBAR events from the period 1 July 2022 to 30 September 2023 needed to be reported by 28 October 2023, ensuring no backlog remains from the previous annual reporting system.

The Transfer Balance Cap

The Transfer Balance Cap represents the maximum amount of superannuation assets a member can transfer into retirement phase accounts exempt from tax. Starting 1 July 2025, the general cap increases from $1.9 million to $2 million.

However, this increase is subject to proportional indexation, meaning a member’s increased cap depends on their original capped amount and when their pension commenced. This system maintains fairness, preventing uniform cap inflation regardless of older pensions or previous caps. Trustees and members should monitor individual caps accurately as they plan pension commencements and transfers.

Reporting Complex and Time-Sensitive Events

While most TBAR events are reported quarterly, certain events requiring faster reporting include:

• Voluntary commutations in response to an ATO excess transfer balance determination must be reported within 10 business days after the month-end in which the commutation occurred.

• Commutations mandated by a Commissioner’s Commutation Authority must be reported within 60 days of the authority’s issuance.

  
  

These shortened timeframes ensure prompt ATO oversight where excess transfer balances present compliance risks. Failure to comply with these tighter deadlines can lead to penalties and jeopardize the tax-exempt status of retirement phase income streams.

Compliance: Transfer Balance Account Report

Given the complexity of TBAR rules and frequent legislative updates, SMSF trustees are urged to maintain comprehensive, up-to-date records of all pension commencements, commutations, and other events impacting transfer balance accounts. Leveraging professional SMSF administration software, seeking expert advice, and regularly reviewing ATO guidance will help trustees avoid late lodgement penalties, incorrect excess transfer balance calculations, and compliance breaches.

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(GENERAL INFORMATION ONLY)

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