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 Reuters
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 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.
Julian Smith is a partner in the Maddocks Commercial team.
Julian advises extensively in the following areas:
Julian advises clients ranging from public companies servicing the wholesale financial services market to high net worth individuals and their advisers.
Julian has been with Maddocks since undertaking articles in 2001.
The legal information and commentary on this site is general only. Documents ordered through Cleardocs affect the user's legal rights and liabilities. To assess their suitability for the user, legal accounting and financial advice must be obtained.
For more information, contact Maddocks on (03) 9258 3555 and ask to speak to a member of their team.