Big concessions looking likely for transfer balance limit: ATO

The ATO has given a strong indication that there will be concessions made in relation to events-based reporting for those SMSFs with balances significantly lower than $1.6 million, after a period of industry consultation “blew out” the ATO's expectations.

         

 

Superannuation director at the ATO Howard Dickinson said it is clear the profession is not entirely on board with either of the models the tax office put forward in its position paper on events based reporting, which you can read more about here.

As a result, in the coming weeks, the ATO is likely to provide further concessions to those SMSF members who are not at high risk of exceeding the transfer balance limit.

“If I give you a hint as to how that concession looks – what we are considering is providing further concessions in relation to those members whose balances are significantly below the 1.6 million cap,” Mr Dickinson said at the SMSF Summit in Adelaide last week.

“However, as you know, your members often have multiple accounts, in multiple different locations. So there are going to be some members where we allow this concession for their SMSF, who may find themselves negatively impacted, because of their balances and other elements of the system,” he said.

“We will not be able to warn them because we will not have access to their information in a timely enough manner to do so, which is the intent for us getting the data accurately and in a timely way. That’ll be an issue for those trustees, and indeed, the professionals who support them,” he said.

This concession is in line with suggestions made by industry associations, including the Institute of Public Accountants, and stakeholders like software providers.

Events-based reporting has touched a nerve in the SMSF industry, with many professionals on the ground sceptical about whether the regime will work in practice.

Aquila Super partner, Chris Levy, previously told SMSF Adviser the government is out of step with how professionals work in practice on this particular item.

“There's this tremendous disconnect between what a couple of, almost academics, within Treasury think about how the superannuation system works or how SMSFs work. What happens in the real world is quite different,” Mr Levy said.

The response from the industry to the position paper was also substantial.

“We issued the position paper and got 170 responses. It blew out the ATO’s processes, we expected to get 10 or 20,” Mr Dickinson said.

By: Katarina Taurian
23 OCTOBER 2017
smsfadviser.com

More Articles

Why crypto treads an uncertain path through tax minefield

The taxation of digital assets used for lending and borrowing would benefit from clear-sighted...

Read full article

Wheat Production by Country

Check out the countries that produce the most...

Read full article

Labor tweaks stage 3 tax cuts to make room for ‘middle Australia’

Following years of mixed messaging, Labor has bowed to economic pressure and announced changes to its stage...

Read full article

Investment and economic outlook, January 2024

Region-by-region economic outlook and latest forecasts for investment returns. . What might shipping...

Read full article

Quarterly reporting regime means communication now paramount: expert

Communication between SMSF trustees, accountants and advisers is more crucial than ever with the quarterly...

Read full article

Four timeless principles for investing success

Investing success can mean different things to different people. Being clear on what success means for you is...

Read full article

Plan now to take advantage of 5-year carry forward rule: expert

This is the last year that the five-year catch-up contribution rules for concessional contributions can be...

Read full article

Super literacy low for cash-strapped

Financial literacy around superannuation is poor for many lower-income people, who still question why they...

Read full article

Sofie Korac is an Authorised Representative (No. 400164) of Prudentia Financial Planning Pty Ltd, AFSL 544118 and a member of the Association of Financial Advisers.

Financial Advice Sydney and the North Shore Office based in Gordon NSW

Financial Services Guide - Disclaimer & Privacy Policy

^