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In order to support the introduction of the $1.6 transfer balance cap (TBC) from 1 July 2017, the ATO has announced new reporting obligations for SMSFs.

From 1 July 2018, any SMSF that has a member’s balance with $1 million or more will be required to report events impacting a member’s transfer balance account (TBA) within 28 days after the end of the quarter in which the event occurs.

If the member has a balance of less than $1 million, they will be required to report any events at the time they lodge the funds income tax return.


The way in which these events will be reported is via a Transfer Balance Account Report (TBAR).

 The TBAR is used to capture information about super amounts moving in and out of retirement phase accounts. This enables the ATO to record and track an individual’s balance for both transfer balance cap and total super balance purposes.

It is important to note that a TBA includes information from all of a members superannuation pension accounts, including one from a SMSF, Retail funds, Corporate funds, Public Sector funds, Industry funds, annuity providers and other funds.

All superannuation providers, SMSFs and life insurance companies, with members in retirement phase will be required to complete and lodge this report to the ATO. The ATO will collate the data under the members TFN and make available a consolidated Transfer Balance Account.


Events that are required to be reported include:

  • Superannuation income streams that commence or begin to be in the retirement phase on or after 1 July 2017
  • Commencing a retirement phase income stream (including starting to receive a death benefit income stream)
  • Partial and full commutations (whether to an accumulation account, or out of the superannuation system)
  • Superannuation income streams that stop being in the retirement phase
  • LRBA repayment events
  • Compliance with a Commutation Authority issued by the Commissioner
  • Personal injury (structured settlement) contributions on or after 1 July 2017
  • A commutation of an income stream in response to an  Excess Transfer Balance (ETB) Determination issued to a member of a fund by the ATO
  • Commutation Authority- compliance or reasons for non-compliance

Income stream value fluctuations, pension drawdowns and the ceasing of a pension (due to no funds remaining) do not affect a member’s TBA and therefore are not events that need to be reported through the TBAR.


Where an income stream is fully or partially commuted, the TBA is reduced (debited) by the value of the commutation.

LRBA Repayments

A member will receive a credit in their TBA where an LRBA:

  • was entered into on or after 1 July 2017; and
  • a loan repayment shifts value from accumulation phase interests to increase the value of retirement phase interests

Law Companion Guide 2016/9 is currently being updated to include more details about when one of these credits arises and how its value should be calculated.

Structured Settlement Contributions

If the fund receives a payment for a personal injury the member has suffered (structured settlement payment), the members TBA will reduce by the value of the contribution.

Commutation Authorities

Where a members TBC has been exceeded (i.e. over $1.6m), the ATO will issue a commutation authority. The amount specified for the member to commute will represent the value the members TBA will be reduced.


A transitional approach is being used to assist SMSFs to move to an events-based reporting framework. SMSFs will not be required to commence reporting using the TBAR until 1 July 2018, however, TBAR lodgments are available from 1 October 2017, should reporting and lodgment want to be made earlier.

Although SMSFs will not generally need to commence TBAR reporting until 1 July 2018, SMSFs will need to ensure they have appropriately documented pension account valuations and decisions for the 2018 financial year. Until reporting begins, SMSF members must monitor the value of pension accounts they receive to ensure they are not in excess of the TBC from 1 July 2017 onwards.

If a fund does not lodge the TBAR by the required date, the member’s TBA will be adversely affected and as such, the fund may be penalised.

Further information regarding the TBAR and event based reporting can be found here.

Further information regarding a member’s TBA and the debits and credits that affect the account can be found here.

For any technical questions, or to find out about how our services can support your business, call our team on 03-5226 3599 or email Also, follow us on social media to keep up to date with our latest posts and blogs.

A question we come across from time to time, the answer to which depends on the specific details in the pension documents. A pension will cease upon the death of a member, however this does not necessarily mean that pension minimums will not need to be met.


Where a super income stream automatically transfers to a beneficiary on the death of a pensioner (an auto reversionary pension) you must ensure that the minimum pension payments continue to be made, including in the year the member in receipt of the original pension dies.

Where a pensioner in receipt of a non-reversionary account-based pension dies, there is no requirement for the minimum pension payment to be made in the year of death (TR 2013/5). If the deceased member’s benefits are subsequently used to commence a new pension to a beneficiary, you will be required to ensure the new minimum annual pension amount is paid in the relevant year.




Where a member who was receiving a non-auto reversionary super income stream dies, the fund will continue to be entitled to claim ECPI in the period from the member’s death until their benefits are applied to:


  • Be paid out as a lump sum as soon as it was practicable to pay the superannuation lump sum; or
  • Be paid out as a new pension as soon as it was practicable to commence the new pension.

What this means is that the earnings remain exempt from tax until the death benefit is paid to a dependant, or paid to the deceased member’s estate. The phrase as soon as was practicable is not defined by law, however the ATO suggests a timeframe not exceeding 6 months from the date of death to be an acceptable guideline. 


For any technical questions, or to find out about how our services can support your business, call our team on 03-5226 3599 or email Also, follow us on social media to keep up to date with our latest posts and blogs.

With the super reforms and transfer balance caps now in place, consideration for SMSF’s and the planning and structure of members accounts is now at its utmost importance. In our blog CGT Relief, the ability to utilise CGT relief can alter the structure of a fund and where an actuarial certificate is required to calculate the exempt current pension income (ECPI).


SMSF’s are classed as either segregated or unsegregated funds. Segregated funds do not require an actuarial certificate as the funds’ assets are allocated to either an accumulation or pension pool. Unsegregated funds have always been required to obtain an actuarial certificate to determine the percentage of income that is exempt from tax where the fund has both accumulation and pension accounts.

SMSF ClassificationActuary required?
– both pension & accumulation accounts in the fund
– 100% pension phase; or
– 100% accumulation phase; or
– segregated assets

Note: Funds in 100% accumulation clearly don’t require an actuary certificate where the assets are not segregated in the accounts.

Post Reforms

At 1 July 2017, there are some important changes that may affect when and how you apply for an actuarial certificate.

A “Personal Transfer Balance Cap” now limits a member to $1.6m in pension phase, and remain in the tax-free environment. Where the accumulitive pension balances for an individual exceeds their transfer balance cap , the members will be required to remove the excess. This can be done by commuting amounts from one or more pension accounts to accumulation phase before 1 July 2017, or by withdrawing the excess as a pension payment.

When applying for actuarial certificates in scenarios like this, it is important that all transactions between member accounts are correctly recorded and shown on the application form provided by the actuary provider.

Funds that are considered segregated and wish to utilise CGT relief using the segregated method cannot transfer part of an asset to accumulation phase. It must be the full value of the asset. On the face of it, the transfer of the asset to accumulation phase could have you thinking, “is this fund now an unsegregated fund?” The answer is no. As the whole value of the asset has been commuted, this asset is allocated to the accumulation account and every other asset in the fund is allocated to the pension balance, thus the fund is still segregated and therefore no actuarial certificate is required.

Refer to the below diagram (prepared by Accurium) for a guide on when an actuarial certificate is required from 30 June 2017 (ie. Lodgement of the 2017 SMSF Return):

Another area of focus from the changes introduced relates to Transition-to-Retirement Income Streams (TRIS). From 1 July 2017, a TRIS will no longer be considered in ‘retirement phase’ and eligible for a tax exemption on earnings. Instead, earnings from TRIS’s will be taxed at 15%. From an actuary perspective, a single member fund with an accumulation account & TRIS income stream will have no tax-exempt income and therefore not require an actuary certificate to be obtained.

The transition to retirement income stream (TRIS) measure is a SMSF mechanism that allows members to have access to their superannuation benefits prior to retirement once they reach their preservation age.

Prior to 30 June 2017, the benefits of a TRIS were two-fold:

  1. Members could access benefits within a restricted minimum and maximum percentage band (4% and 10% respectively) based on their pension balance(s) each year
  2. Earnings generated from the TRIS account were treated as tax exempt income and therefore zero tax is applied to the earnings

On 1 July 2017, a significant change occurred to TRISs in that the tax exemption on earnings from TRISs was removed. The change will apply to all TRISs regardless of what date they commenced.


The new law passed states that a TRIS will ALWAYS remain as a TRIS even if the member satisfies a full condition of release, unless the member notifies the trustees of the fund that they have met a full condition of release and converts the pension to an Account Based Pension (ABP).

However, the new regime post 30 June 2017 allows a TRIS to enter “retirement phase” and gain access to the pension exemption where a member:

  • Notifies the trustee of them having met the condition of release of ‘retirement’
  • Notifies the trustee of them having met the condition of release ‘permanent incapacity’ and notifies the trustee
  • Notifies the trustee of them having met the condition of release ‘terminal medical condition’ and notifies the trustee
  • Attains age 65 (does not have to notify the trustee)

Therefore, if a member in receipt of a TRIS meets one of the above condition of releases, the TRIS will be deemed to be in “retirement phase” and therefore gains access to the pension exemption. The pension will be counted towards the members $1.6m personal transfer balance cap.  Conversely, a TRIS that does not meet a condition of release will not be deemed to be in retirement phase and therefore not receive access to the pension exemption, nor count towards the $1.6m transfer balance cap.

A TRIS that is in retirement phase will then have the option to convert to an ABP. This will allow the member to have no restriction on the maximum pension that can be withdrawn as the pension has been converted from a TRIS to an ABP.  In effect, when a condition of release is met, a TRIS and a ABP will be treated the same EXCEPT that the TRIS will have a maximum pension withdrawal limit.

It is recommended that any TRIS that is exempt from tax be converted to an ABP to remove any confusion around:

  • Whether a maximum pension withdrawal limit should apply (if categorised as a TRIS)
  • Separating which TRIS pensions are exempt or non-exempt from tax (does the 15% tax rate apply)

For any technical questions, or to find out about how our services can support your business, call our team on 03-5226 3599 or email Also, follow us on social media to keep up to date with our latest posts and blogs.

With all the changes in the SMSF space, it is now more important than ever to ensure your firm is informed regarding CGT relief and the transfer balance cap. All the new super reforms now mean SMSF members and trustees are more reliant on SMSF professionals advice and guidance.

The new reforms are applicable to SMSF’s with one or more pensions, and will need to take appropriate action to ensure they are in line with the new requirements prior to lodging the 2017 income tax return. Below is a summary of the elements of the Transfer Balance Cap, CGT Relief and Transition to Retirement Pensions (TRIS) which apply from 1 July 2017.


  • The $1.6 million transfer balance cap measure is a limit imposed on the total amount that a member can transfer into a tax-free pension phase account from 1 July 2017
  • There are two caps which relate to the transfer balance cap:
    • General Transfer Balance Cap – refers to the total cap of $1.6m
    • Personal Transfer Balance Cap – refers to the individual’s cap, which is proportionally indexed and carried forward if the balance is not utilised
  • Action must be taken whilst completing the 2017 accounts to ensure member pension balances are no higher than $1.6m at 1 July 2017 (i.e. pension commutations need to be made at 30 June 2017)
  • Any transfer into a pension account will increase the members personal transfer balance cap, whilst there are only certain circumstances that will decrease the members personal transfer balance cap.


  • The transitional CGT relief (i.e. cost base reset rules) allows SMSF’s to reset an asset’s cost base to market value
  • CGT relief can be used where the fund has an ABP over $1.6m or a TRIS of any balance
  • CGT relief is only available for assets owned by the fund on or before 9 November 2016 (being the date the legislation entered Parliament)
  • The cost base reset process can occur at any point from 9 November 2016 to 30 June 2017, meaning the availability of market values during this time is the key
  • Two CGT relief methods can be used;
    • Segregated method:
      You can apply CGT relief ONLY to the value of the amount that is commuted back to accumulation. For example if $400k is commuted back to accumulation, CGT relief can be used for up to $400k of the fund’s assets.
    • Unsegregated method (also referred to as the proportionate method):
      The fund can use CGT relief for any or all of its assets whether in accumulation or pension phase.
  • The test of what status the fund takes (segregated or unsegregated) is based on the status of the fund from 9 November 2016 to 30 June 2017:
    • For the fund to be deemed a segregated fund for CGT Relief purposes, it must be segregated from 9 November 2016 to 30 June 2017, and remain segregated for the FULL period to 30 June 2017.
    • If a fund is segregated on 9 November 2016, then becomes unsegregated during the year and remains unsegregated until 30 June 2017, then the fund will be deemed an unsegregated fund, and the proportionate method can be used.
    • If a fund is unsegregated on 9 November 2016, but became segregated (100% pension) up to 30 June 2017, CGT relief cannot be applied.  A fund must be segregated for the full pre-commencement period, being 9 November to 30 June 2017 for the segregated method to be applied.  Because the fund does not meet the criteria for the proportionate method either, No CGT relief can be used.


  • From 1 July 2017, the transfer balance cap limits the total amount a person can transfer into the retirement phase of a superannuation fund.
  • A TRIS is not considered to form part of the retirement phase of superannuation if the member:
    • has not attained age 65; or
    • has satisfied the definition of retirement, terminal medical condition or permanent incapacity, but has not notified the superannuation income stream provider for the superannuation income stream of that fact.
  • If the member has a TRIS and meets the retirement phase definition (point b (i) or (ii) above), documentation will be required to be prepared to convert the TRIS to an ABP (it does not automatically convert).
  • A TRIS that does not form part of the retirement phase will be taxed like an accumulation account, and therefore lose its tax exemption.


For any technical questions, or to find out about how our services can support your business, call our team on 03-5226 3599 or email Also, follow us on social media to keep up to date with our latest posts and blogs.

Not many sleeps now until the new contribution rules kick in as of 1 July 2017.  So here’s a reminder to share with your team to ensure they’re all prepared to consult with confidence and accuracy to your clients.


Concessional Contribution Cap

The existing caps for the 2016/2017 FY for concessional contribution limits are (table 1):



Under 50


Over 50



From 1 July 2017, the concessional contributions cap will be reduced as follows (table 2):



Under 50


Over 50



Individuals over 65 years of age must be gainfully employed in order to make concessional contributions. That is, working for at least 40 hours over 30 consecutive days during the financial year.


Non-Concessional Contribution Cap and Bring Forward Provisions

From 1 July 2017, the annual Non-Concessional Contribution limit has been reduced from $180,000 to $100,000 per annum.


Individuals under the age of 65 are able to utilise the Bring Forward provisions, of which the following conditions will apply:

  • An individual will be restricted to contributing additional Non-Concessional Contributions if their Total Superannuation Balance (TSB) exceeds $1.6 million. The TSB is tested based on the 30 June balance in the previous financial year.
  • An individual’s balance between $1.5 million and $1.6 million can make a contribution or use the bring forward provisions up to the annual NCC cap amount of $100,000. Whilst the 30 June balance may then exceed $1.6 million, the contribution is acceptable.


(Table 3)

Total Super Balance at

30 June Prior

NCC Cap for the

First Year

Bring Forward


Less than $1.4m


3 years

$1.4m to less than $1.5m


2 years

$1.5m to less than $1.6m



$1.6m or more




In addition, if the bring forward provision is triggered in subsequent years the client’s total super balance must still be under the cap balance at 30 June of any given year in order for the Non-Concessional Contributions to be accepted.  


Note that the members balance must be under $1.6 million at 1 July of the given year the contribution is made.  This means if the balance DURING the year moves over the $1.6 million threshold prior to the Non Concessional Contributions being made (due to market movements or SG contributions), those contributions will be acceptable if they meet the requirements as per table 3 above.


The current market perception of the new rules is that the limit of the bring forward provisions for the 2017 financial year is based on the following two years Non-Concessional Contribution limit of $380,000. However, the changes don’t take effect until 1 July 2017 effectively providing your clients with the ability to contribute $540,000 up until 1 July 2017.


(Table 4)


Single Year Cap

Limit of BFP based on
the year it is triggered


















It’s a smart idea to scan your SMSF data base for clients who are effected by any of the new rules looming for 1 July 2017, including the Pension Caps and planning for CGT Relief.  Get some quality consulting completed to set your clients up the best possible way.



How often are you left with a client who makes a contribution after the date you tell them to?  For example, if you told your client to make a contribution the week before 30 June, however, due to the client’s inability to remember this important date, they make the contribution after the advised date, only for the contribution to reach the funds bank account in the first week of July.  If this was your client, in what year would you declare the contribution?


It is important that the different sources of contributions received by an SMSF are properly identified to enable correct treatment in the financial statements.

TR 2010/1 is a very important ruling, as it provides direction with respect to timing of contributions, including payments by way of cheques or promissory notes; payments made by person to a third party to satisfy a liability; and a contribution by way of debt forgiveness.


Paragraph 13 of the ruling details when certain payments will be deemed to have been received by the fund:

If the funds are transferred by ...

A contribution is made when ...

Making a cash payment  to the SMSF

The cash is received by the SMSF

An electronic transfer of funds to the SMSF

The funds are credited to the SMSF's account.

Giving the SMSF a money order or bank cheque on which payment is made

The money order or bank cheque is received by the SMSF, unless the order or cheque is dishonoured.

Giving the SMSF a personal cheque (other than one that is post-dated) that is presented and honoured with cash or its electronic equivalent

The personal cheque is received by the SMSF, so long as the cheque is promptly presented and is honoured.

Giving the SMSF a personal cheque that is post-dated and that is presented and honoured with cash or its electronic equivalent

The cheque is able to be presented for the payment (that is, the date on the cheque), so long as the cheque is promptly presented and is honoured.

A related party (as maker) issuing a promissory note, payable on demand at face value, to the SMSF and the note is paid with cash or its electronic equivalent

The promissory note is received, so long as payment is demanded promptly and the note is honoured.

A related party (as maker) issuing a promissory note, payable on a future date at face value, to the SMSF and the note is paid with cash or its electronic equivalent

Payment is able to be demanded or required to be made, so long as the demand (if required) is promptly made and the note is honoured.


What should be noted is that when a contribution is being paid by way of a cheque, the contribution is “deemed” to be made when the contribution is received by the trustees of the fund, provided the intention is to present the cheque for payment in a timely manner.  However, where a member pays a contribution by way of electronic transfer, the contribution is counted as being made when the contribution hits the SMSF’s bank account.


So, when a member of a SMSF writes a cheque on 28 June, and it is not deposited in the SMSFs bank account until 1 July, the contribution will be treated as having been made in June, providing the cheque is in the hands of the trustees before midnight on 30 June.


If you have a SMSF that is in this situation, we suggest you consider following these steps:


  1. Determine when the cheque was dated and when the money hit the SMSF’s bank account.
    Remember, the contribution can only be counted in the initial year if the intention is to present the cheque for payment in a timely manner. 
    (There is no indication given of how many days would be considered “Timely”.  Our view is less than 5 business days)
  2. To ensure that their contribution was received and counted in the initial year, a simple written and dated acknowledgement of receipt of the contribution should be prepared to confirm when the trustees received the contribution. 
  3. In the SMSF’s accounts, the contribution needs to be shown as an unpresented cheque, not a sundry creditor.