1.6 Million Transfer Balance Cap

From 1 July 2017, the amount the Members will be able to transfer into the tax exempt pension phase of superannuation will be capped at $1.6 million.

Any amounts in excess of the cap will need to be transferred out of the tax exempt pension phase, either back to the accumulation phase (earnings taxable at 15%) or out of the superannuation system entirely as a lump sum. Although transfers to the tax exempt pension phase will be limited to $1.6 million, there are no restrictions on how much a Member can continue to hold in the accumulation phase. If your pension balance is over $1.6 million, you will need to make a request to convert part or all of your pension accounts into accumulation phase to ensure that your total pension balance does not exceed $1.6 million. You can download the minute template by clicking on the button below:

If you have a pension balance of over $1.6 million, you might need to purchase an actuarial certificate to determine which portions of the SMSF are taxed at 15% and which portions are tax free. For more information on actuarial certificates, please click on the button below:

If your total pension balance is over $1.6 million, you will not be able to use the segregated method for the SMSF’s assets. For more information, please see the Tax Office Video below:

For more information on the Super changes, please see our website page here.

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Superannuation Warehouse is an accounting firm and do not provide financial advice. All information provided has been prepared without taking into account any of the Trustees’ objectives, financial situation or needs. Because of that, Trustees are advised to consider their own circumstances before engaging our services.

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