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Transfer balance cap

Transfer balance account

Section: 9.2

A transfer balanced account is basically a record of all transactions in relation to certain types of superannuation income streams. The balance within the transfer balance account will determine whether a member has exceeded their personal transfer cap at the end of the day. Members will have only one transfer balance account for all of their transactions until their death.

When does a transfer balance account commence?

A transfer balance account commences on either:

  • a member receives their first retirement phase income stream after 1 July 2017
  • a member already receives a retirement phase income stream on and after 1 July 2017

A transfer into and out of retirement phase are generally referred to as 'Credit' or 'Debit' events. The transfer balance account will need to keep a record of all transactions as this will determine whether a member has exceeded their personal transfer balance cap.

A member continues to have a transfer balance account even if the member subsequently cease to be a retirement phase recipient of a superannuation income stream. A member only cease to have a transfer balance account when they die.

A transition to retirement income stream (TRIS) is not in the retirement phase unless a superannuation income stream benefit is currently payable from it and the member:

  • is 65 years old or older, or
  • has met a relevant condition of release with a nil cashing restriction (retirement, terminal medical condition, permanent incapacity) and they have notified the superannuation provider for the TRIS of that fact, or
  • receives TRIS as a reversionary beneficiary

From 1 July 2017, superannuation income stream providers will be taxed on earnings made from assets supporting a TRIS that is not in the retirement phase.

The age pension (or other type of government assistance payments) and a pension received from a foreign superannuation fund are also not included in a member's transfer balance account because pensions are not superannuation income streams.

This technical resource is intended for the use of financial advisers only. It is current as at the date of publication but may be subject to change. This publication has been prepared without taking into account a potential investor's objectives, financial situation, needs or objectives. Before making a recommendation based on this material, you should consider its appropriateness based on the client's objectives, financial situation and needs. Rainmaker Group is not a registered tax agent under the Tax Agent Services Act 2009. Your client should refer to a registered tax agent before relying on information published herein that may impact their tax obligations, liabilities or entitlements.

Last modified: Wednesday, September 23, 2020