New limits on pension transfers
06 December 2017
There is now a limit to the total amount of superannuation that you can transfer into a pension account, where your investment earnings (including capital gains) are tax-free.
For 2017/18, this transfer balance cap is $1.6 million, with each member of a couple having a separate cap.
If you have more than $1.6 million in super, you can keep the excess in an accumulation account, where your earnings will be taxed at up to 15%, and capital gains taxed at 10% (if held for 12 months or more).
In the future, this pension cap will be indexed to the consumer price index (CPI) in $100,000 increments.
Transition-to-retirement (TTR) pensions are not included in this transfer balance cap, but will count if you are considered to be in ‘retirement phase’ through satisfying the following conditions:
- terminal medical condition
- permanent incapacity
- reaching age 65.
Tax on earnings from investments held in TTR pensions is increased from 0% to a maximum of 15%.
You can continue to make transfers to the retirement phase as long as you have available cap space.
Have a question?
Your financial adviser can provide you with more information and answer any questions that you may have.