From 1 July 2017 members with superannuation in pension phase are subject to a $1.6 million transfer balance cap. This means that:
Example:
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.
We provide accounting and wealth management services to clients in Woodend, Gisborne and Macedon Ranges areas within Victoria Australia. |
Wednesday 5 April 2017
DOES THE $1.6 MILLION SUPER PENSION CAP AFFECT YOU?
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