$1.6m super transfer balance cap – clarification
Posted by Northadvisory on November 3, 2016
Clarification has been provided on the intended operation of the proposed $1.6m super transfer balance cap. The cap will inlcude:
• the value of pension accounts on 30 June 2017
• commencement of new income streams after 1 July 2017
• the value of reversionary income streams, and
• notional earnings that will accrue on excess transfer balance amounts.
Further, superannuation lump sums will no longer count towards the minimum pension repayments for an income year.
Transitional provisions will provide for capital gains tax relief on assets that are forced to be transferred from pension phase to accumulation phase. An SMSF that has a member’s balance above $1.6m in pension phase will no longer be able to segregate assets for income tax purposes.
This measure was originally announced in the 2016/17 Federal Budget.
There could be planning opportunities available to SMSF trustees that have a balance over the $1.6m cap. If you have a balance over $1.6m and would like to know how we can help please feel free to call;
Read more Superannuation articles.