Get ready for Transfer balance account reporting (T-BAR)
At 1 July 2017, individuals were only allowed to have $1.6 million of assets in the retirement phase of their superannuation fund (i.e. a limit on the amount of savings/assets that can be in tax free pension phase in superannuation).
Individuals with retirement phase pensions at 30 June 2017 who have an aggregated value (in all superannuation funds) in their member’s accounts between $1.6 and $1.7 million had until 31 December 2017 to reduce their member balance in pension phase to $1.6 million.
To determine whether the $1.6 million transfer balance cap has been breached, pre-existing retirement phase superannuation income streams that a member was receiving on 30 June 2017 and that continued to be paid to them on or after 1 July 2017 must be reported to the ATO on or before 1 July 2018.
From 1 July 2018, all SMSFs must also report the following events that affect their member’s transfer balances that occur after 1 July 2017:
- Commencing retirement income streams
- Pension commutations.
- Certain limited recourse borrowing arrangement payments.
- Personal injury contributions.
The frequency of reporting of above mentioned transfer balance account events (T-BAR reporting) depends on the size of the total amount of superannuation in the SMSF:
- SMSFs with member balances of $1 million or more will have to report within 28 days after the end of the quarter in which the event occurs; and
- SMSFs with member balances of less than $1 million will only have to report yearly when they lodge their SMSF annual return.
This T-BAR reporting will enable the ATO to determine whether both the $1.6 million transfer balance and total superannuation caps have been breached. Your Nexia adviser can assist you with your T-BAR reporting.
10% GST withholding on the sale of new residential premises from 1 July 2018
Property developers who sell new residential premises on or after 1 July 2018 (i.e. the date of signing the contract) will be subject to a new GST withholding tax regime where the purchaser of the property will be required to send the GST component of the sale price directly to the ATO at settlement.
Property developers will need to give written notification to purchasers that they need to withhold GST and purchasers will also need to complete two additional GST withholding forms:
- A GST property settlement withholding notification form to advise the ATO that a sale of new residential premises has taken place – form must be provided to the ATO before settlement; and
- A GST property settlement date confirmation form to advise the ATO when the settlement date is – form must be provided to the ATO either on settlement date or when payment is made.
Your Nexia adviser will be pleased to explain to buyers and sellers of new residential property their new legal obligations.