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  • Transfer balance account

    The transfer balance account is where we record your transactions and track amounts in retirement phase. Your transfer balance determines whether you have exceeded your transfer balance cap at the end of any given day.

    You will only have one transfer balance account for all of your retirement phase interests which will remain active until your death. Special rules apply for child recipients of a death benefit income stream.

    Your transfer balance account commences on either:

    • 1 July 2017, if you were already receiving a retirement phase income stream on 30 June 2017
    • the day you first receive a retirement phase income stream.

    You can make multiple transfers into the retirement phase as long as you have available cap space. Your available cap space will increase proportionally with indexation. If at any time you meet or exceed your transfer balance cap, you will not be entitled to indexation.

    The transfer balance cap is a limit on how much super can be transferred from your accumulation super account (or accounts) to a tax-free ‘retirement phase’ account (or accounts). There is no limit on the amount of money you can have in your accumulation super account (or accounts).

    The transfer balance cap is set at $1.6 million for the 2017–18 year. It will be indexed in line with the consumer price index (CPI), rounded down to the nearest $100,000.

    If you exceed your transfer balance cap, you may have to:

    • commute (ie convert a portion of your retirement income stream into a lump sum) the excess from one or more retirement phase income streams
    • pay tax on the notional earnings related to that excess.

    If the total amount in your retirement phase account (or accounts) grows over time (through investment earnings) to more than $1.6 million, you won’t exceed your cap. If the amount in your pension account (or accounts) goes down over time, you can’t 'top it up' if you have already used all of your cap space.

    Different tax rules will apply to certain defined benefit income streams, known as 'capped defined benefit income streams', as you usually can’t transfer or commute excess amounts from these income streams.

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      Last modified: 24 Apr 2018QC 54354