Transfer Balance Cap of most concern to superannuation professionals

The $1.6 million Transfer Balance Cap is the issue most concerning superannuation professionals, a poll of Tax & Super Australia members has found.

29.1% of respondents to the poll said the Transfer Balance Cap was the issue of most concern.

“Many individuals are concerned with the way the appreciation of investments and investment losses are going to be reflected in this transfer balance cap,” said Tax & Super Australia.

“The short answer is that investment performance is not taken into account for the transfer balance cap. If a pension account grows due to an appreciation of investments, this is well and truly good for the pensioner. However the reverse is true in the case of investment losses – there is no way to replenish the limit imposed by the cap on the account of poorly performing investments.”

19% of respondents said the loss of ECPI for Transition to Retirement Income Streams was most concerning. Tax & Super said this change would have a “big impact” on clients.

15.5% were most concerned by the reduced concessional contribution caps and 12.7% by the limitations on non-concessional contributions.

“The removal of anti-detriment provisions and the new ability from July 1, 2018 to carry forward any unused concessional cap are both still a challenge, but less so than the above reforms,” said Tax and Super Australia.

Deductions for personal contributions concerned 9.5% and the transitional CGT relief 8.2% of respondents.

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3 Replies to “Transfer Balance Cap of most concern to superannuation professionals”

  1. I HAVE READ THE ATO IS CONSIDERING AMENDING THE RULES FOR MARKET LINKED PENSIONS. IN THAT, A PENSIONER WITH A SMSF CAN COMMUTE A MLP BACK TO ACCUMULATION TO ACHIEVE THE $1.6M CAP.

    IS THIS CORRECT?

    1. I think these are the regulations to which you are referring. Note that these are only at the draft stage, and aren’t made by the ATO. Though I expect the ATO will issue some guidance about the operation of regulations, if they are made, in due course.

      Also note that we can’t provide advice about your individual circumstances.

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