This information is for people who:
hold (or will hold) retirement phase super accounts, and
want to check whether they have exceeded (or will exceed) their transfer balance cap.
From 1 July 2017, there is a new transfer balance cap for retirement phase accounts.
What is the transfer balance account?
The transfer balance account is a method of tracking transactions and amounts in retirement phase. The balance of your transfer balance account determines whether you have exceeded your transfer balance cap at the end of any given day. The transfer balance cap is a limit on the amount you can hold in retirement phase ($1.6 million in 2017–18).
You will start to have a transfer balance account on:
1 July 2017, if you are already receiving a retirement phase income stream at the end of 30 June 2017, or
the day you first commence receiving a retirement phase income stream.
Your transfer balance account measures your transfer balance, which is the sum of credits less the sum of debits posted to the account.
See also:
New transfer balance cap for retirement phase accounts
Changes to your transfer balance account
A change in your transfer balance only occurs when a credit or debit event occurs. Changes in the value of interests in the retirement phase (for example, investment losses) do not affect the transfer balance account. Note that your transfer balance account can have a negative balance when your debits exceed your credits.
You will only have one transfer balance account for all of your retirement phase interests. Your transfer balance account will remain active until your death. Special rules apply for child death benefit recipients (see New transfer balance cap – child death benefit recipients).
Credits to your account
Credits to your transfer balance account increase your transfer balance and reduce your available cap space. The most common transfer balance credit arises when you begin receiving a super income stream (pension) that is in the retirement phase.
The following amounts are credits to your account:
the total value of any super interests that support retirement phase income streams you are receiving on 30 June 2017
the value of new retirement phase income streams, including super death benefit income streams and deferred super income streams, that you begin to receive on or after 1 July 2017
the value of reversionary super income streams at the time you become entitled to them (although the timing of the credit may differ in certain circumstances)
the excess transfer balance earnings that accrue on any excess transfer balance amount you have.
For a capped defined benefit income stream, the credits above are calculated on the special value of the income stream.
The Treasury Laws Amendment (2017 Measures No.2) Bill 2017 provides for an additional credit where a super fund makes a payment towards a limited recourse borrowing arrangement. This payment increases the value of retirement phase interests.
The value of your super interests will be calculated by your super fund(s) and notified to us. If you believe the value is incorrect you should contact your super fund(s).
Excess transfer balance earnings
If your transfer balance exceeds your transfer balance cap, you will have an 'excess transfer balance'. If you have an excess transfer balance, we will calculate your 'excess transfer balance earnings' and credit this amount to your transfer balance account.
You can transfer the excess to an accumulation account or out of super. You will need to ensure you remove an amount large enough to cover both your excess and your excess transfer balance earnings.
About Authors : Swan Partners is a progressive service provider dedicated in providing high quality tax consultancy, accountant in victoria park, bookkeeping service in perth, BAS lodgement service in perth and accounting services to individuals, sole-traders, partnerships, trusts, and companies.
Footnotes : Bookkeeper in Victoria Park | Bookkeeping Service in Perth | Accountant in Perth
hold (or will hold) retirement phase super accounts, and
want to check whether they have exceeded (or will exceed) their transfer balance cap.
From 1 July 2017, there is a new transfer balance cap for retirement phase accounts.
What is the transfer balance account?
The transfer balance account is a method of tracking transactions and amounts in retirement phase. The balance of your transfer balance account determines whether you have exceeded your transfer balance cap at the end of any given day. The transfer balance cap is a limit on the amount you can hold in retirement phase ($1.6 million in 2017–18).
You will start to have a transfer balance account on:
1 July 2017, if you are already receiving a retirement phase income stream at the end of 30 June 2017, or
the day you first commence receiving a retirement phase income stream.
Your transfer balance account measures your transfer balance, which is the sum of credits less the sum of debits posted to the account.
See also:
New transfer balance cap for retirement phase accounts
Changes to your transfer balance account
A change in your transfer balance only occurs when a credit or debit event occurs. Changes in the value of interests in the retirement phase (for example, investment losses) do not affect the transfer balance account. Note that your transfer balance account can have a negative balance when your debits exceed your credits.
You will only have one transfer balance account for all of your retirement phase interests. Your transfer balance account will remain active until your death. Special rules apply for child death benefit recipients (see New transfer balance cap – child death benefit recipients).
Credits to your account
Credits to your transfer balance account increase your transfer balance and reduce your available cap space. The most common transfer balance credit arises when you begin receiving a super income stream (pension) that is in the retirement phase.
The following amounts are credits to your account:
the total value of any super interests that support retirement phase income streams you are receiving on 30 June 2017
the value of new retirement phase income streams, including super death benefit income streams and deferred super income streams, that you begin to receive on or after 1 July 2017
the value of reversionary super income streams at the time you become entitled to them (although the timing of the credit may differ in certain circumstances)
the excess transfer balance earnings that accrue on any excess transfer balance amount you have.
For a capped defined benefit income stream, the credits above are calculated on the special value of the income stream.
The Treasury Laws Amendment (2017 Measures No.2) Bill 2017 provides for an additional credit where a super fund makes a payment towards a limited recourse borrowing arrangement. This payment increases the value of retirement phase interests.
The value of your super interests will be calculated by your super fund(s) and notified to us. If you believe the value is incorrect you should contact your super fund(s).
Excess transfer balance earnings
If your transfer balance exceeds your transfer balance cap, you will have an 'excess transfer balance'. If you have an excess transfer balance, we will calculate your 'excess transfer balance earnings' and credit this amount to your transfer balance account.
You can transfer the excess to an accumulation account or out of super. You will need to ensure you remove an amount large enough to cover both your excess and your excess transfer balance earnings.
About Authors : Swan Partners is a progressive service provider dedicated in providing high quality tax consultancy, accountant in victoria park, bookkeeping service in perth, BAS lodgement service in perth and accounting services to individuals, sole-traders, partnerships, trusts, and companies.
Footnotes : Bookkeeper in Victoria Park | Bookkeeping Service in Perth | Accountant in Perth
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