Home » E-News » News

Categories

Accountant Aged Care Allied Health Annuity Asset Finance Asset Planning Asset Protection Asset Protection Strategies Assets Assets and Risks Ato Bas Binding Death Benefit Nominations Binding Financial Agreement Bonds Brexit Budget Budgeting Business Business Registrations Business Support Business Tax Deduction Business Value Capital Gains Tax Capital Protection Catherine Frost Cgt Checklists Commercial Property Community Corporate Trustee Cryptocurrency Death Benefit Nomination Debt Debtors Deceased Estate Depreciation Director Director Id Divorce Economic Update Economy Emily Kermac Employees Estate Planning Executor Fbt Federal Budget Finance Finances Financial Advice Financial Plan Financial Update Franking Credits Government Grants Gst Home Office Hybrid Unit Trust Individual Ownership Information Session Insolvency Insurance Interest Rates Investment Loan Investment Loans Investment Property Investments Janet Kohan Jobkeeper Jobmaker Joint Ownership Ken Burk Land Tax Lending Market Update Mortgage Broking Mygov Negative Gearing Overseas Gifts Parental Leave Paris Financial Pat Mannix Payg Payg Variation Pension Practice Practice Valuations Private Wealth Property Rebecca Mackie Record Keeping Research & Development Retirement Retirement Planning Retirement Savings Salary Sacrifice Scams Self Managed Superannuation Self Managed Superannuation Fund Self Managed Superannuation Fund Borrowing Shares Small Business Smsf Smsf Borrowing Smsf Self Managed Superannuation Fund Strategic Business Structuring Structures Succession Plan Superannuation Superannuation Fund Tax Tax Benefits for Super Tax Concession Tax Deduction Tax Losses Tax Offset Tax Planning Tax Savings Temporary Full Expensing Tenants in Common Tfe Training Trust Trusts Will Working from Home

$1.6 Million Pension Cap for SMSF’s

$1.6 Million Pension Cap for SMSF’s

Now that the proposed $1.6 million pension transfer balance cap is law, I thought it best to explain.

Under this new law referred to as the “Transfer Balance Cap”, from 1 July 2017 every superannuation fund member is limited to $1.6 million in their pension account where the investment income is tax free. Members with amounts in excess of $1.6 million in their pension account will be taxed at 15%. Earnings accumulated in the pension account can remain if the account grows in excess of $1.6 million. However, if the pension account reduces, due to a poor investment performance, members will not be able to increase their pension account back up to $1.6 million.

The transfer balance cap is indexed in increments of $100,000 in line with the CPI. If an individual has not fully utilised this limit and chooses to transfer their funds, after an indexation increase has occurred, then they can use a percentage of the index increase based on what they have already used.

It sounds tricky and for the first year it will take some careful planning so talk to our team.

Pat Mannix, Partner, Paris Financial

Follow me on Twitter @mannix_pat

 

Image courtesy of Vichaya Kiatying-Angsulee at FreeDigitalPhotos.net


Tags: Pat Mannix | SMSF | Superannuation | Superannuation Fund |