Changes to Transfer Balance Cap

There was an article in yesterday's Australian newspaper (Jan 15) about changes to the TBC. Has anyone read the article or know what changes are to be made? I would appreciate your assistance.

 

Assume the article refers to this. I wonder how many who have already have reached the TBC will think they can add another $100k to their super. That's going to be fun for them.

Indexation of Transfer balance cap

 

Hi SatayKing

Does it mention that the TBC will definitely go to 1.7m? If it does, will
that begin on Jan 1 or July 1? Thanks

 

I don't know. Depends on the CPI calculations for one thing and the Government for the other. And it won't be a blanket $1.7m. It'll depend on a proportional calculation based on the highest TBC value for an individual at a given point.

 

The TBC is not increased or increasing. It MAY be increased. For some.

Indexation of the general transfer balance cap from $1.6 to $1.7 million will occur on 1 July 2021 if the All Groups CPI figure for the December 2020 quarter is 116.9 or higher.

All super members with a non-smsf fund should be able to access their TBC data through the fund and with ATO MyGov or through a tax agent. For SMSF taxpayers it is wise if they dont use TBC compliant software that this be considered. Old school accountants who use old "accounting software" to prepare SMSF work should already have migrated. If they havent its a further issue they could face that harms their clients. Feature of m,odern SMSF software should include:

- Visible member reports with a eleible serviec period, tax / untaxed elements, preservation elements
- Track contribution caps
- Lodge and report TBC annual and regular reporting to the ATO.

If the SMSF tax return looks "similiar" in font and appearance to a personal tax return its a sign of a issue that the software being used may "just" be tax software and not SMSF software.

Examples of good software providers used by experienced smsf accountants include BGL Simple Fund and Class... and others.

 

Looks like the TBC will increase to $1.7m on 1 July 2021 as the All Groups CPI figure was 117.2

Consumer Price Index, Australia, December 2020

 

The increase doesnt apply to existing pensions with a $1.6m cap. But for new accumulation balances going to pension it may offer a marginal change. This is going to become a complex mess like the old reasonable balance limits prior to 2007

ATO have rapidly updated their website

https://www.ato.gov.au/Individuals/...your-super/Indexation-of-Transfer-balance-cap

 

Great up to date info. Just checked the ATO website and there it is in black and white. The new cap is 1.7 million from July 1, 2021. Thanks for the posts.

 

Looks like the concessional and non concessional caps will rise to $27.5k and $110k based on the Dec AWOTE data released today. Awaiting confirmation from the ATO

 

The non-concessional cap may be indexed annually at 1 July and may not apply yet - This has some uncertainty. And those already using the bring forward rule may not benefit from indexing once the annual cap is triggered. It is believed some ATO guidance may be required. ...Super is never simple