Q: I’m 67 years of age, and I’ve kept my SMSF in accumulation phase so far. There is only about $200,000 in my SMSF. I’d like to take a $7,000 lump sum out of my SMSF if possible. If I do this, will I need to provide a TBAR or some other kind of report to the ATO?
A: I am going to answer the question, but I’m going to also cover a few other issues which came through in other people’s questions. I’ll wrap them up in my response to this questions here.
Few issues that we need to look at. Number one, are you allowed to actually access your super? Number two, what are the rules around how you can access those benefits? Then to get to your point, what are the reporting requirements that may exist for your fund?
If we go back to your question, you’re 67 years of age, are you allowed to access your super? Well, we know that turning 65 is a condition of release which allows unrestricted access to your money. Check your fund trust deed for any rules around that. But the super rules certainly allow you to access your money. Even if you’re still working, you’re over 65, they become unrestricted, non-preserved.
The next part is, how can those benefits be accessed? I mentioned 65 as a condition of release which allows unrestricted access. You would be allowed to take money by way of a lump sum, pensions or a combination of both. Again, just check the specific rules of your fund around how benefits can be accessed.
Then we get into the real question is, do we need to report this? Does our fund, SMSF, need to report it? You’ve asked about a transfer balance account report or a TBAR. TBARs are only required where a transaction occurs in your fund where that transaction affects your personal transfer balance cap. So things like starting pensions, taking lump sums from pensions, ceasing pensions, commencing a reversionary pension, those sorts of pension transactions. A payment that you take from lump sum, a payment that you take from accumulation phase would not usually affect your transfer balance cap, and therefore you would not need to lodge or report using a transfer balance account.
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