Fact checked
There were no big changes for self-managed superannuation funds (SMSFs) announced during the Federal Budget in October 2022, but there are several key measures SMSF owners and trustees must keep in mind going into 2023.
The following are the changes to rules and policies surrounding SMSFs that are slated to roll out this year.
Updated reporting obligations for SMSFs
The Australian Taxation Office (ATO) announced changes to the annual lodgements of transfer balance account report (TBAR).
Starting 1 July 2023, all SMSFs with members in the retirement phase must report TBAR quarterly.
Under the current rules, some SMSFs can lodge their TBAR with the SMSF annual return when all members have a total superannuation balance of less than $1m.
This recent change is expected to remove complexity for SMSFs around when they need to lodge.
Furthermore, this change will provide members with more accurate and timely information, allowing them to manage their transfer balance cap and avoid excess transfer balance tax.
All transfer balance account events that occur in the 2023 income year must be reported by 28 October 2023.
It is advised to start transitioning to quarterly lodging as soon as possible to save time by the end of the income year.
Extension of the temporary reduction minimum draw-down rates
During the Budget, it was announced that the 50% reduction of the superannuation minimum draw-down requirements for account-based pensions will be extended until 30 June 2023.
For context, the minimum drawdown requirements determine the minimum amount of a pension that a retiree has to draw to from their superannuation in order to qualify for tax concessions.
According to accounting firm Hailston + Co, this change will allow retirees to avoid selling assets to satisfy the requirements.
The digitalisation of trust income reporting
There will be an option to lodge income tax returns for trustees electronically.
This measure, however, will only commence starting 1 July 2024.
Hailston + Co said this change would reduce the compliance burden on SMSF trustees and reduce the processing times on the side of ATO.
Increase in penalty unit rates
The penalty rate was increased from $222 to $275, effective 1 January 2023.
According to the SMSF Association, this will impact a range of penalties, including SMSF trustee penalties imposed by the Commissioner of Taxation.
Proposed three-year audit cycle scrapped
The three-year audit cycle proposed in the 2018-2019 Budget is officially cancelled.
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