ATO to issue excess transfer balance cap notices

25 September 2018
| By Hannah |
image
image
expand image

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 $1.6 million 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 advises.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest developments in Super Review! Anytime, Anywhere!

Grant Banner

From my perspective, 40- 50% of people are likely going to be deeply unhappy about how long they actually live. ...

11 months ago
Kevin Gorman

Super director remuneration ...

11 months 1 week ago
Anthony Asher

No doubt true, but most of it is still because over 45’s have been upgrading their houses with 30 year mortgages. Money ...

11 months 1 week ago

Jim Chalmers has defended changes to the Future Fund’s mandate, referring to himself as a “big supporter” of the sovereign wealth fund, amid fierce opposition from the Co...

2 days ago

Demand from institutional investors was the main driver of growth in Australia’s responsible investment (RI) market in 2023, as the industry continued to gain momentum....

2 days ago

In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges....

2 days ago