Should SMSFs take advantage of the ATO's concession on TBARs?

While the concession is generous and will reduce administrative burdens on SMSFs (and thereby costs), it may be better not to apply the concession but to lodge TBARs soon as possible after the event has occurred.

This will be particularly so if there is a real possibility of the affected member being in or moving towards an excess pension situation.  Further, the greater the time between the event occurring  and its correction, the more difficult and time consuming will be correction.

What at first glance is a reasonable concession may turn out to have unpleasant consequences.  The better course would be to submit TBARSs for pension commencements and commutations as soon as possible after the relevant events have occurred. By relying on the concession, advisers and their SMSF clients are simply accepting the transfer of responsibility for management of the excess pension position from the ATO to themselves.