While SMSFs were previously either quarterly or annual reporters, new laws came into effect from 1 July 2023 where this distinction was removed.

As such, all SMSFs required to report transfer balance account events are now considered quarterly reporters. This includes all reportable events that may have occurred in the 2022–23 financial year. In effect, all reportable events that occur from 1 July 2022 to 30 September 2023 will have a reporting date of 28 October 2023.

Mr O’Meagher noted a significant amount of retrospective accounting in the past drove the ATO to reduce the time frame of TBA reporting.

“I think it used to be too easy for people in the past to retrospectively go back and make changes to improve the outcomes for their members,” he told SMSF Adviser.

“By making use of technology to get as close to real-time reporting as possible, we can essentially close the door on opportunities for people to get around the system. By real time, I’m suggesting reporting on a daily basis, not hour by hour.

“I think it would mean that if someone starts a pension on a Thursday, it’s in the system by Thursday night (unless something significant occurs which needs more time to be set up).”

However, Mr O’Meagher said the ATO would require additional funding to improve technology to enable real-time reporting now.

Meanwhile, he urged advisers and accountants to be proactive by preparing for any significant events that could take place in an SMSF.

For example, if their client is turning 65, they could initiate conversations around whether they would like to shift their fund to the pension phase, he said.

According to the Class 2023 Annual Benchmark Report, only one in eight Class SMSF members over 65 have their entire balance in accumulation, compared to one in two APRA fund members who have their entire balance in this phase.

Most Class SMSF members over 65 are capitalising on tax savings by moving balances into retirement phase income streams to maximise their retirement benefits, the report stated.

“There’s going to be greater pressure on making sure that SMSF professionals are being proactive, and are ready for these events to take place,” Mr O’Meagher underscored.

“They will also need to communicate regularly with clients and other SMSF professionals being used by the client (including auditors, advisers, and accountants). Everyone in the ecosystem needs to be involved so that no one drops the ball when these significant events come up.”

SMSF Adviser Technical Strategy Day a vehicle for education

Mr O’Meagher will elaborate on the shift to quarterly transfer balance cap reporting at the upcoming SMSF Adviser Technical Strategy Day, which Act2 Solutions is supporting as a platinum partner.

He said the business has been supporting SMSF Adviser and its events for almost a decade as it is an “excellent vehicle” for educating the SMSF industry, including established and new SMSF professionals.

“The SMSF industry changes so rapidly. SMSF Adviser is very good at keeping on top of and reporting on those changes,” he said.

“The technical strategy day will help the SMSF sector keep abreast of the changes. But more significantly, attendees can hear from other experienced individuals about how these changes could be seen as opportunities and how they can take advantage of them to achieve better outcomes for members.”

Mr O’Meagher concluded by reiterating that SMSF professionals are required to be updated on new strategies and technological tools available to service their clients.

“Anyone who is administering SMSFs and not making the best use of the technology, and education and training opportunities available out there aren’t doing the best for trustees and members,” he asserted.

“SMSF professionals have a simple mandate. Our role is to help provide the best retirement outcomes for SMSF members.”

To hear more from Andy O’Meagher about how SMSF professionals can prepare clients for the new quarterly transfer balance cap reporting requirements, come along to the SMSF Adviser Technical Strategy Day 2023.

It will be held in the following locations:

• Tuesday, 17 October at Four Seasons Hotel Sydney
• Wednesday, 18 October at Rydges Southbank Brisbane
• Wednesday, 25 October at the Grand Hyatt Melbourne

Click here to book your tickets and don’t miss out!

For more information, including agenda and speakers, click here.