The 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 general transfer balance cap, transfer balance account, transfer balance and personal transfer balance cap (transfer balance cap);
the consequences of a transfer balance exceeding a person's transfer
balance cap, resulting in an "excess transfer balance" including:
- the excess transfer balance tax and how this is calculated;
- when the Commissioner will issue an excess transfer balance determination; and
- the effect of transfers and/or commutations on the transfer balance.
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
More Cleardocs information on related topics
You can read earlier ClearLaw articles on the 2017 superannuation reforms including the transfer balance cap and how it can be managed.
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