NEWS – ATO may soften on proposed event-based reporting SMSF rules

NEWS – ATO may soften on proposed event-based reporting SMSF rules

NEWS – ATO may soften on proposed event-based reporting SMSF rules

Controversial and laborious event-based reporting rules for Australia’s army of DIY super fund operators may be softened by the tax office in coming weeks.

Under current plans the Australian Taxation Office wants all SMSFs (self-managed super funds) to report much more regularly to Canberra.
At present most SMSFs need only deal with the tax office once a year at “tax time”.
But the ATO ultimately wants funds reporting “event-based” activity on a monthly basis.
The new reporting rules are set to begin on a quarterly basis under a two-year phase-in, starting on July 1 next year.
The new reporting regime has the potential to affect a lot more fund operators than this year’s changes in pension tax rules.
The majority of funds will not be affected by the tax rule changes around a $1.6 million individual balance cap introduced on July 1.
But almost any fund could be caught in a new web of bureaucracy planned by the ATO.
The SMSF Association, which represents professionals in the sector, is lobbying Canberra to make an exemption in reporting requirements for SMSFs with less than $1m in individual assets.
Such an exemption would make a lot of sense in the current framework which already effectively exempts this group from the extra tax potentially loaded on funds that breach the new balance cap.
Jordan George, head of policy at the SMSF Association says: “We are expecting to hear where the ATO has got to on the issue in the next fortnight.”
ATO Assistant Commission Kasey McFarlane recently told an industry conference the idea of the exemption for funds with less than $1m was currently under consideration.
The “event — based” reporting requirements centre on major movements of money inside SMSFs such as starting a pension or lump sum activities.
SMSF operators will be expected to report key events to the ATO within 10 days of the formalised reporting period. Until July 2020 this will be 10 days after the end of each quarter.
There are fears within the SMSF sector that the application of new reporting rules, coming so quickly off the back of a complex regime change around tax rules, will reduce the attraction of DIY funds, which have been enjoying strong growth in recent years.
The key changes under the tax rules were a reduction in the amount that could be contributed on both a pre-tax and after-tax basis to superannuation fund and the imposition of the $1.6m balance cap on super funds which will require tax to be paid on earnings on amounts above this level.
SuperBenefit works with SMSF trustees to CONNECT them with the advisors they need for a better result. A call is FREE.
If you have any questions, why not give us a call – it’s FREE! No obligation. 0407 361 596, Paul
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About SuperBenefitnews

Self-Managed Superannuation Service Providers in Australia. SuperBenefit provides a wholistic SMSF assistance, education and administration service continuum - 1. “assistance” is help of whatsoever nature where our overall SMSF experience and knowledge enables us to provide assistance/help without any legal (or “license”) limitations. 2. “education” involves providing knowledge through teaching, coaching and mentoring about all matters SMSF, including (but not limited to) investment issues such as equities and property, 3. “administration” encompasses all admin aspects of legally required SMSF trustee and member record keeping including (but not limited to) audit and ATO matters. In keeping with our key point that SuperBenefit does not provide Financial Advice, where issues arise from 1, 2, and/or 3 above Indicate a need for a legally authorized provider (such as a Financial Adviser) and the client does not have their own service provider, the client can utilize SuperBenefit’s ‘Connect Assist’ … SuperBenefit, in itself, does not provide Financial Advice, but it does provide the wherewithal for great SMSF service. WE do not provide Financial Advice or any other service that requires a legally authorized provider. However, where such advice or service is required we have our ‘Connect Assist’, a SuperBenefit resource we use to connect clients to a Licensed Advisor or other legally authorised service provider. Call us 0407 361 596, no obligation FREE Connection call to see how we can help you!
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