Life Interests Testamentary Trusts


From 1 July 2017 members with superannuation in pension phase are subject to a $1.6 million transfer balance cap. This means that:   

  • The maximum amount a member can have in pension phase is $1.6 million (across all super accounts).
  • Amounts above $1.6 million need to be withdrawn from the fund or commuted back to accumulation phase.
  • If funds greater than $1.6 million are left in pension phase, additional tax will be levied on the excess amount.
  • Earnings on amounts in pension phase remain tax free, whilst those in accumulation phase are taxed at 15%.  

John has $1.8 million in pension phase in super split between two funds, $1.4 million in fund A and $400,000 in fund B.
To comply with the changes, John applies to fund B to commute $200,000 back to accumulation phase before 1 July 2017.
This ensures that John’s remaining pension balance across both funds of $1.6 million is tax free and that no excess transfer tax is levied.
Please note special rules apply to defined benefit pensions.

Please contact Andrew Marshall or Janine Orpwood at Langley McKimmie Chartered Accountants on (03) 5427 8100 to discuss further.

We provide accounting and wealth management services to clients in WoodendGisborne and Macedon Ranges areas within Victoria Australia.  

The content within these articles was correct at the time of writing. Please contact us for updated information and advice. 

We provide accounting and wealth management services to clients in Woodend, Gisborne and Macedon Ranges areas within Victoria Australia.

blog archive

Recent Posts



With 30 June 2022 approaching, individuals and small businesses should be giving some consideration to year-end tax planning strategies, including: Instant Asset Write Off…
Are you making an after-tax superannuation contribution in the 2022 financial year? Want to take advantage of the 2022 $27,500 concessional contributions cap? To…