Speaking on a recent ATO webinar, superannuation director Helen Morgan flagged new updates across the ATO and its online services that advisers can stay on top of, noting they are available to access before the indexation of the transfer balance cap begins.
Ms Morgan said advisers and agents can already see if the ATO considers that the individual is entitled to have their personal transfer balance cap indexed based on the information the Tax Office has already received and processed, but understandably, this information could change between now and 1 July.
“This information will not tell individuals what their anticipated index personal transfer balance cap may be,” Ms Morgan reminded.
“The ATO table is available online and may help you give ahead an understanding of what their index cap may be should the highest-ever balance of their transfer balance account remain unchanged.
“Individuals and their agents can also see all the events which we consider make up the individual’s transfer balance account; that is, events received and processed by us.”
Ms Morgan strongly encourages advisers and their clients to check these events and see if anything is missing if they think an event has not been reported to the ATO, anything that has been duplicated and if there are any credits from reversionary income streams that will come into effect before 1 July 2021.
“These are all things that may impact an individual’s entitlement to indexation or may lead us to determine that an individual has exceeded their transfer balance cap,” she said.
“If you or your client think something is missing or there is an error in what has been reported, this should be addressed with their fund; it can be useful to share this information around what makes up the transfer balance account with your fund.
“Whether the fund is an SMSF or an APRA fund and you consider that an event has been reported to us which is not reflected here or that there’s an event here where it should not be because you’ve cancelled it, there’s most likely an issue with your reporting and we encourage you to contact us so that we can resolve it.”
Ms Morgan said if you are the agent for the SMSF and are picking up the phone to contact the ATO about the fund reporting, “it can be very useful to specifically state that you are the agent for the fund and are contacting us about the fund reporting for the member and would like to know if any of the fund reporting is suspended”.
“If we receive new or amended reporting which changes the highest-ever balance in an individual’s transfer balance account and their entitlement to indexation, we will update this information once we have received and processed it,” she said.
For pending reversionary credits, if the fund has reported this information to the ATO, the ATO noted that advisers will be able to see on ATO online the value of the credit and the date it will be applied to the individual’s transfer balance account, and this will help advisers plan and manage the individual thresholds.
“The new page will emphasise the individual personal transfer balance cap, and the defined benefit income cap tool will also be updated as part of our tax time 2021 changes,” Ms Morgan said.
“Individuals can use this tool to determine what their defined benefit income cap for the year is, particularly if they are in one of those circumstances where the cap is going to be prorated such as the year when they turn 60.”