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On 10 March 2017, the ATO released the final version of Law Companion Guideline LCG 2016/9 dealing with the new superannuation transfer balance cap. It was released in draft form in November 2016 as Draft LCG 2016/D9.
Terry Hayes, Thomson ReutersThe Guideline provides guidance on how the transfer balance cap (set at $1.6 million for the 2017-18 financial year) operates for account-based superannuation income stream products. It provides specific guidance on the following new concepts:
The Guideline notes that transition to retirement income streams (TRIS) are not included in a transfer balance account as they are not in the retirement phase. From 1 July 2017, superannuation income stream providers will be taxed on earnings made from assets supporting a TRIS. Also, the age pension (or other types of government assistance payments) and a pension received from a foreign superannuation fund are not included in a transfer balance account because these pensions are not superannuation income streams.
Source: This article was first published in Thomson Reuters' Super & Financial Services News Alert. To subscribe to Super & Financial Services News Alert, or for more information, please see http://legal.thomsonreuters.com.au/super-financial-services-news-alert-email/productdetail/55794
You can read earlier ClearLaw articles on the 2017 superannuation reforms including the transfer balance cap and how it can be managed.
Qualifications: LLB (Hons), BEc (Hons), Monash University
Leigh is a Partner in Maddocks Tax and Structuring team. Leigh has extensive experience in advising Australian and multinational companies, high net worth individuals, accountants and financial advisers on all areas of taxation law.
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