ATO to issue excess transfer balance cap notices
The Australian Taxation Office (ATO) will start issuing excess transfer balance cap (ETB) determinations to taxpayers with over $1.6 million in their superannuation in the pension phase, with SUPERCentral advising that individuals receiving such a notice act on it quickly.
Penalties could be imposed for not complying with the determination, as well the ATO potentially directing the superannuation trustee to transfer sufficient pension balances out of pension phase.
SUPERCentral advised that individuals receiving the notice should not ignore the determination, as “to … do nothing is the worst response”. They should also remember that they could not apply the same objection and review procedures to a determination as they could to tax system notices.
They should then review the accuracy of the determination, as it could be that the incorrect information was provided to the ATO. The organisation recommended using the myGov website to review the TBAR amounts which had been reported, and also to check that a commutation of pension had been reported.
Finally, should there be an excess, SUPERCentral said that individuals should commute it by the due date.
“An excess over $1.6m of a transfer balance account can only be “corrected” by having a TBAR debit equal to the excess. This means commuting (in part or in full) one or more pensions … Doing nothing will only cause the ATO to effect a mandatory commutation of whichever pension the ATO chooses (and at greater transaction cost to the taxpayer),” the group advices.
AUTHOR
Hannah Wootton
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