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  • Transfer balance account

    The transfer balance account is a record of the events that count towards your transfer balance cap.

    The balance of your transfer balance account 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:

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

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

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    Transfer balance cap

    The transfer balance cap is a limit on how much superannuation can be transferred from your accumulation superannuation account to a tax-free ‘retirement phase’ account.

    The transfer balance cap is currently $1.6 million. 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 (that is, convert a portion of your retirement phase 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.

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

    Different tax rules apply to 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: 18 Oct 2019QC 54354