Life Interests Testamentary Trusts


The transfer balance cap was introduced from 1 July 2017 and is a cap on the how much you can transfer to a retirement phase pension in your superannuation fund.  The cap ultimately restricts the entitlement your SMSF has to receive a tax exemption on retirement phase earnings.

Each individual has their own personal transfer balance cap which will initially align with the transfer balance cap in the year you commence a retirement phase pension.  Based on how much you commence a pension for will determine how your personal transfer balance cap is indexed.

With a starting transfer balance cap of $1.6 million, anyone who commenced a retirement phase pension prior to the first indexation date will have an initial personal transfer balance cap of $1.6 million.

Once indexation occurs, there is no single personal transfer balance cap that applies to everyone, and everyone can potentially have their own personal transfer balance cap depending on their situation.

An individual can have a transfer balance cap anywhere between $1.6 million and $1.7 million.

If you exceed the transfer balance cap, you are liable to pay tax on the excess transfer balance earnings. You also need to transfer any excess to a super accumulation account or withdraw it as a lump sum.

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.

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