ATO delays personal transfer balance cap availability date

Since 1 July 2021, the superannuation general transfer balance cap has been indexed, meaning individuals will have a personal transfer balance cap between $1.6 million and $1.7 million. 

Their personal transfer balance cap is based on the highest-ever balance of their transfer balance account between 1 July 2017 and 30 June 2021.

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In a recent online update, the ATO said that members will be able to view their personal transfer balance cap from 15 July 2021 rather than 5 July 2021, as originally advised.

“The delay is due to system issues limiting our ability to deploy indexation for all individuals who currently have a transfer balance account,” the ATO said.

“Members who are planning to start a new retirement phase in July 2021 are advised to take this into consideration when planning their affairs.”

The ATO noted that members starting their first retirement phase income stream on or after 1 July 2021 will still have a personal transfer balance cap of $1.7 million.

SMSFs will still be able to report retirement phase event information to the ATO during this period; however, the ATO will not be processing the reporting for funds or members during this period.

“This means we will not be able to issue or revoke excess transfer balance determinations we have sent to a member, or commutation authorities we have sent to funds,” the ATO explained.

“We encourage you to continue reporting transfer balance cap information to us even though we will not be processing your reporting during this period.

“Please contact us through Super CRT if you have any concerns about commutation authorities you need to take action with a due date in July 2021.”

The ATO calculates entitlement to indexation and the personal transfer balance cap after indexation based on the information reported to and processed by the ATO when indexation occurs. It is also noted that this will be the only place members can see the personal transfer balance cap if it had a transfer balance account before 1 July 2021.

Indexation of the general transfer balance cap will affect funds depending on whether funds had a transfer balance account before 30 June 2021, and if it had a transfer balance account prior to indexation occurring and, at any time between 1 July 2017 and 30 June 2021, the balance of the account was $1.6 million or more.

This also includes having a transfer balance account prior to indexation occurring and the highest-ever balance of your transfer balance account between 1 July 2017 and 30 June 2021 was never $1.6 million or more.