“The proposed model that the ATO is talking about is purely in relation to events-based reporting of events that impact on an individual’s transfer balance account,” explained Ms Macfarlane.

“I want to be clear that it’s not about daily accounting by SMSFs, it’s not about daily calculation of earnings of member balances, its purely about the transfer balance account.”

She also reminded practitioners that SMSFs will only need to report something under this model if one of the members has an event that impacts their transfer balance account.

“So if an SMSF has members in any particular period that doesn’t have one of these events, then they don’t have to report anything to us,” she said.

Ms Macfarlane explained that the excess transfer balance tax will continue to accrue on an excess amount each day up until the time the ATO issues an excess transfer balance determination, so reporting events to the ATO sooner will help to minimise this.

“So the longer it takes for relevant information to be reported to the ATO about an individual’s transfer balance amount, the longer the period it is that the ATO doesn’t have visibility. We won’t know that someone is in excess and therefore we won’t be in a position to issue that excess transfer balance determination,” she explained.

“In the meantime, those earnings on that excess will be continuing to accrue, and the individual’s liability will be continuing to increase.”

Many SMSFs, she noted, may only have to report one transfer balance cap debit of credit in the life of their fund.

“For example, they commence an income stream, let it run, and that’s it. The only thing they’ll ever have to report under this model is the commencement of the income stream,” she said.

The broader superannuation industry, Ms Macfarlane said is becoming increasingly automated through electronic transactions, initiatives such as SuperStream and the transition to single touch payroll.

This increased automation she said is improving the real time visibility of superannuation guarantee obligations and payments and could also present some opportunities for the SMSF space.

“It presents some opportunities to streamline the regulatory SMSF reporting requirements and for SMSF members to have that real-time visibility of contributions that employers make on their behalf and to know how they’re tracking in terms of contributions caps. It also allows us to think about online reporting for SMSF auditors,” she said.