Head of Education & Content
The TBAR system revolves around the reporting of “events”, hence the name “events-based reporting”.
The reversion of the pension will not count towards your client’s Transfer Balance Cap until the first anniversary of his wife’s death (ie August 2018). However, the “event” which triggers reporting is not the counting of the pension towards the cap but rather the reversion of the pension in August 2017.
The due date for lodgement of the TBAR will depend on whether the fund is an annual or quarterly reporter for TBAR purposes.
If the fund is an annual reporter, the TBAR will not be due until lodgement of the fund’s SMSF Annual Return for the 2017/2018 financial year (ie May 2019).
However, if the fund is a quarterly reporter, the TBAR will be due on 28 October 2018. This is the due date for quarterly reporters for any event in the 2017/18 financial year.
Whether a fund is an annual or quarterly reporter depends on the Total Superannuation Balances of the fund members as at 30 June 2017 (if a retirement phase pension was in place at that date) or as at 30 June of the year immediately prior to the first retirement phase pension commencing. If a member of the fund had a Total Superannuation Balance of $1m or more at the relevant date, the fund is a quarterly reporter. All other funds are annual reporters.
When completing the TBAR, you will need to report the date of death value of the pension and an “effective date” equal to the date of death of the original member. For quarterly reporters, this will almost certainly mean processing the fund’s accounts to August 2017 in time to meet the 28 October 2018 deadline even if it is not (at that time) possible to complete the full 2017/18 year end.
We have a free online tool that calculates your client's transfer balance cap. Simply register here for Heffron IQ to access it.