Generally pensions cannot be commenced if the initial pension account balance is greater than $1.9m (the current transfer balance cap which applies from 1 July 2023).
transfer balance cap
Personal transfer balance caps – view now on MyGov
Any super fund member who has commenced an account-based pension since 1 July 2017 can now view their updated personal transfer balance cap by using the MyGov website to access ATO online services.
Transfer balance cap set to increase to $1.9m
The transfer balance cap, which is currently $1.7m, will be increased to $1.9m with effect on 1 July 2023. The increase of $200,000 in the gap is due to indexation.
The impact of transfer balance cap indexation
Starting 1 July 2021, the transfer balance cap (“TBC”) will be indexed from $1.6 million to $1.7 million (“Indexed TBC”). Although this change sounds like good news, it does come with quirks not everyone is aware of and not knowing them can lead to adverse outcomes.
TBAR Lodgement – pension commencement
Commutation of a retirement phase income stream is an event that affects a member’s transfer balance account for the transfer balance cap (“TBC”). The Transfer Balance Account Report (“TBAR”) has to be lodged with the ATO by the relevant due dates. The transfer balance cap is currently $1.6 million.
ATO key superannuation thresholds for 2019/20
The ATO has released some of the key super thresholds for the 2019/20 financial year.
Beware the estate planning transfer balance cap
So what is this “estate planning transfer balance cap trap” that can arise from adopting the mirror reversionary pension strategy? More importantly, is there a way to avoid it? Well, it all stems from how the Transfer Balance Account works. Let’s begin with a bit of a refresher: As we all know, the Transfer Balance […]
Family trusts more important than ever
Family trusts are increasingly being used for retirement planning purposes since the Government introduced more measures to limit the ability to make both concessional and non-concessional contributions to superannuation funds.