SuperConcepts SMSF technical specialist Anthony Cullen said some clients are trying to ascertain how they received an excess non-concessional contribution notice for the 2018 financial year, on the back of a purported total superannuation balance (TSB) above $1.6 million.

“Their TSB should not be above this level and appears to have been derived from the double counting of balances that existed on 30 June 2017 and subsequently used to commence a pension on 1 July 2017,” Mr Cullen explained.

“We’ve spoken to the ATO and they acknowledge they’re investigating with a view to providing more detailed clarity in the near future.”

Mr Cullen said one client has successfully resolved the matter over the phone, although they have not yet received written confirmation of this.

“For another client, they have progressed down the path of objecting to the excess non-concessional contribution notice, as this appears the only avenue available to them,” he said.

“These two cases not only highlight an inconsistent approach to dealing with the matter but a broader misunderstanding of the nature of the problem itself.”

He also highlighted that contacting the ATO to discuss options for rectifying the issue is problematic when you are the tax agent for the SMSF and not the individual.

“Although we are responsible for lodging the TBAR, the ATO will still cite privacy reasons for not discussing the matter with us. This is another example where being the tax agent for the SMSF and not the individual hampers our ability to deal with the ATO directly on a matter,” he said.

Mr Cullen said following recent discussions with the ATO, it may not actually be necessary for clients to cancel existing transfer balance account reporting due to the TSB double counting issue.

“We’ve seen a lot of concern from our own customers and some confused analysis in the market about this issue, but we do not believe that reports will need to be redone.”

While the issue may be an unintended consequence stemming from the transitional interaction between a member’s TBA and TSB on 1 July 2017, Mr Cullen said a resolution is “needed urgently”.

“It has the potential to impact any clients who are looking to understand their non-concessional contribution bring-forward limits prior to making contributions in the current financial year,” he stressed.