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  • Low-rate cap amount for taxable components of superannuation lump sum payments

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    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

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    This concession applies only to superannuation lump sums paid to you when you have reached your preservation age but before you turn 60 years old.

    The low-rate cap amount is the maximum amount of taxable components (taxed and untaxed elements) that can be taxed at a concessional lower rate.

    For 2017–18, the low-rate cap amount is a maximum of $200,000, but it could be less for you if before July 2017 you received any superannuation lump sums that counted towards your entitlement to a superannuation lump sum tax offset. The amount is indexed to average weekly ordinary time earnings and rounded down to the nearest multiple of $5,000. See Key superannuation rates and thresholds.

    The low-rate cap amount is a 'lifetime' limit. This means that the taxed element and untaxed elements of all superannuation lump sum payments that you receive (as well as the amount of any eligible termination payments for which you became entitled to a rebate before 1 July 2007) when you have reached your preservation age but before you turn 60 years old will be taxed at a concessional rate until your total reaches the low-rate cap amount ($200,000 plus future indexed increases). Payments you receive in excess of the low-rate cap amount will be taxed at the tax rate shown in Table 4 below.

    Consequently, for 2017–18 the maximum amount for which you can be taxed at a concessional rate is $200,000 less any amounts to which the concessional tax rate has previously been applied.

    For more information on how we work out your low-rate cap amount, see Super and tax.

    Table 4: Superannuation lump sum (other than death benefit)

    Under the preservation age at the time of payment

    Element

    Amount

    Tax rate

    Tax free component

    Whole

    Tax free

    Taxed element

    Whole

    20%

    Untaxed element

    Up to the untaxed-plan cap amount, $1,445,000 (see Note 1)

    30%

    Untaxed element

    Over the untaxed-plan cap amount, $1,445,000 (see Note 1)

    45%

    Preservation age to 59 years of age at the time of payment

    Element

    Amount

    Tax rate

    Tax free component

    Whole

    Tax free

    Taxed element

    Up to the low rate cap amount, $200,000 (see Note 2)

    Tax free

    Taxed element

    Over the low rate cap amount, $200,000 (see Note 2)

    15%

    Untaxed element

    Up to the low rate cap amount, $200,000 (see Note 2)

    15%

    Untaxed element

    Over the low rate cap amount, $200,000 (see Note 2) and up to the untaxed-plan cap amount, $1,445,000 (see Note 1)

    30%

    Untaxed element

    Over the untaxed-plan cap amount, $1,445,000 (see Note 1)

    45%

    60 years of age or older at the time of payment

    Element

    Amount

    Tax rate

    Tax free component

    Whole

    Tax free

    Taxed element

    Whole

    Tax free

    Untaxed element

    Up to the untaxed-plan cap amount, $1,445,000 (See Note 1)

    15%

    Untaxed element

    Over the untaxed-plan cap amount, $1,445,000 (see Note 1)

    45%

    Note 1: For 2017–18, the untaxed-plan cap amount is a maximum of $1.445 million, but it could be less for you if you have previously received another superannuation lump sum with an untaxed element from the same superannuation fund. For more information on how we work out your untaxed-plan cap amount, see How tax applies to your super.

    Note 2: For 2017–18, the low-rate cap amount is a maximum of $200,000, but it could be less if you received any superannuation lump sums in a prior income year that counted towards your entitlement to a superannuation lump sum tax offset or, if before July 2007, you received an eligible termination payment after your 55th birthday. For more information on how we work out your low-rate cap amount, see How tax applies to your super.

      Last modified: 28 Jun 2018QC 55656