The Australian Tax Office has proposed a start date for the new events based reporting system for SMSF, with an industry association lobbying for a long transitional period to buy SMSFs more time to adjust.
SMSF Association technical head Peter Hogan said the ATO had considered starting the reporting scheme after the 2016/2017 financial year return lodgement.
According to him, it was a bit early for everyone because the systems would still have to be in place and that only 10 to 15% of funds will lodge by October.
Mr. Hogan said that assistant commissioner Kasey Macfarlane has confirmed the changes could commence either 15 May or 1 July of next year.
It could put a huge amount of pressure on the trustees of small funds, SMSFs and tax agents. Industry bodies continue to work with the ATO to make sure that there will be enough time for funds and agents to prepare themselves before the changes start.
“The initial reporting regime will only involve transfer balance account transactions, so debits and credits, and will not involve the total superannuation balance,” Mr. Hogan added. “These transactions will be reportable 10 days after the month in which the transaction occurs.” However, the exception will be the commencement of pensions.
The ATO suggests that pensions have to be reported at least 28 days after the quarter in which it was commenced to give SMSF trustees time to value assets appropriately.
The obligation to report regularly for SMSFs won’t happen until at least May 2017 but SMSF practitioners and clients have to be conscious of the value of any transactions.
When the first report occurs, clients have to back-fill the reporting history back to 1 July 2017 from when the first transaction happened. This is the first month that the fund has a reportable event.
For more information about SMSF and taxes in Australia, contact a Specialist to discuss your particular circumstances.
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