Tracey Scotchbrook on TBAR, Rollovers and the Transfer Balance Cap: the What, When, Why and How

Wednesday November 7, 2018

Tracey Scotchbrook is a SMSF Specialist Advisor and consultant. Early in her accounting career Tracey had the opportunity to work with self managed superannuation funds, setting her on the pathway to specialisation. 

Tracey Scotchbrook

We had the pleasure of sitting down with Tracey recently to discuss key challenges and opportunities facing the industry today. You can read the full Q&A below.

Can you tell us a little bit about yourself (experience, your company, expertise, etc)?

As a SMSF specialist advisor with over 15 years experience, I particularly enjoy working in collaboration with accountants and advisors, assisting them and their clients to resolve complex SMSF issues. This includes compliance and taxation issues, undertaking compliance reviews as well as providing specialist technical and strategic SMSF advice. This has lead to the formation of Superology, a specialist SMSF consultancy practice.

Superology does not provide tax return preparation or lodgement, financial account preparation or full financial planning services. We have instead chosen to focus on the specialist advisory needs of professional practices and their clients. This enables us to successfully partner with both accountants and advisors as we do not offer competing or conflicting services. Not all practices have the necessary expertise in-house and for accountants many have chosen not to pursue advisory licences as this does not align with their core business. This is where we step in to assist both practitioners and SMSF trustees.

SMSF practitioners should have just lodged their first quarterly TBAR, what are some of the challenges they are facing?

Practitioners have encountered a range of issues as they, clients and the ATO all become accustomed to the new reporting regime.

A number of accountants have had to upgrade their superannuation accounting systems to ensure that they are compliant with the new reporting requirements and can obtain the necessary information via data feeds in a timely manner. Data feeds whilst an important cog in a 'live' software systems, don't necessarily provide data for all accounts, transactions or platforms. For many SMSFs there is a need to still obtain any gaps in information from clients. Educating clients and obtaining the necessary information continues to present hurdles as trustees and practitioners alike adapt to the new reporting requirements.

On boarding new clients and understanding whether their TBAR lodgements are up to date or correct presents its own challenges. Practitioners need to request that clients obtain the relevant information and reports via their personal MyGov account. Often however considerable time has to be spent on the phone with the ATO to determine what has been reported and when. This will improve over time as the ATO updates the information available to tax agents via the Tax Agent Portal. However you will also need to be the individuals Tax Agent to do so.

What are the common mistakes practitioners might have made at this lodgement?

From the 30 June 2018 lodgements the ATO has communicated several issues arising from the first round of reporting.

Duplication has been an issue with the same information reported more than once. The ATO has reported that it would seem in some instances trustees have completed and lodged their TBAR as well as their accountants. Clear communication with clients including updating engagement letters is essential.

Over reporting has been noted in some cases with non-smsf pensions and transactions included in the TBAR lodged for the SMSF. Whist accountants and trustees need to be aware of all superannuation interests for a member, the SMSF is only required to report on pensions and other reportable transactions occurring within the SMSF itself. If the member has other superannuation interests, any reporting will be undertaken separately by that Fund.

The incorrect reporting of fund or member information has been another issue. Reporting items such as ABN, TFN or date of birth data have been incorrectly recorded. With the bulk lodgements required at 30 June 2018 to bring all the existing pensions into the TBAR system it is not surprising that there were some initial teething problems.

One thing we don't know is the level of reporting that has been missed. I have no doubt that this has occurred. This data is not available to us at this time so we don't as yet understand to what extent this has occurred. No doubt the ATO will identify these through SMSF annual return and TBAR data matching in due course.

Would the ATO have any future developments you see ahead for TBAR?

As practitioners and the ATO use the new reporting system, practical issues or gaps will be identified. This will naturally lead to enhancements and/or additional guidance.  One recent example of this includes the reporting requirements for reversionary pensions which will discussed in my session.

The ATO are currently working towards providing tax agent access to historical TBAR information via the Tax Agent Portal. This will alleviate a lot of issues for practitioners as they currently rely on clients accessing the required reports from their MyGov account. Alternatively, the accountants are having to call the ATO to obtain this information over the phone. Access via the portal will streamline this process for practitioners and reduce the number of calls and demands on ATO resources.

What do you see are some of the key takeaways and benefits for practitioners for their practice from attending your session?

In my session I want to highlight some of the practical issues that we are seeing in practice, including:

  • How to deal with reporting errors;

  • Timing considerations for reporting;

  • Identifying the special reporting rules that apply for some LRBA repayments;

  • Complying with Commissioner commutation authorities; and

  • Reporting requirements structured settlement contributions.

You can hear more from Tracey at the 5th Annual SMSF Conference 2018, being held on Tuesday 13 November at the Parmelia Hilton Perth.


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