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