This Client Alert is relevant to Clients with superannuation
Indexation of Contribution caps
Restrictions limit the amount that can be contributed to super, referred to as the contribution cap limits. As of 1 July 2021, the superannuation concessional and non-concessional contribution caps have been indexed. The new caps are:
The total superannuation balance (TSB) limit that determines if an individual has a non-concessional contributions cap of nil will also increase from $1.6 to $1.7 million, effective from 1 July 2021.
*Your ability to access the bring forward arrangement will be dependant on your age and TSB as outlined in the table below:
Contribution and bring forward available to members under 67
Indexation of Transfer Balance cap from 1 July 2021
The general transfer balance cap was $1.6 million. As of 1 July 2021, it was indexed to be $1.7 million.
This now means that there is not a single cap that applies to all individuals. Every individual will have their own personal transfer balance cap of between $1.6 and $1.7 million, depending on their circumstances.
If you start a retirement phase income stream for the first time on or after 1 July 2021, you will have a personal transfer balance cap of $1.7 million.
If you had a transfer balance account before 1 July 2021, your personal transfer balance cap will be:
- $1.6 million if, at any time between 1 July 2017 and 30 June 2021, the balance of that account was $1.6 million or more
- between $1.6 and $1.7 million in all other cases, based on the highest ever balance of your transfer balance account. (Source ATO website)
Reduction to minimum pension drawdowns extended to 30 June 2022
The Federal Government announced an extension of the temporary reduction in superannuation minimum drawdown rates for a further year to 30 June 2022
Each year upon completion of your annual compliance, your minimum and maximum (if applicable) limits need to be recalculated using your age and account balance.
We will send you confirmation of this prior to the end of each financial year, to assist you with meeting your minimum obligations.
Disclaimer: The information contained in this bulletin contains factual information and makes no recommendation or gives any opinions. Accordingly, it is not financial product advice and should not be relied upon as financial product advice.
Questions?
If you have any questions about your SMSF compliance or any of the above matters relating to your SMSF, please contact your regular Blaze Acumen advisor or any of the following:
Michelle McKenzie
Partner 03 9694 3040 mmckenzie@blazeacumen.com.au
Erica Harper
Partner 03 9694 3045 eharper@blazeacumen.com.au
Adam Konsak
Senior Manager 03 9694 3085 akonsak@blazeacumen.com.au