In the lead-up to 30 June 2017 this year, the ATO provided super funds with transitional relief so that if the fund was above the $1.6 million transfer balance cap by only $100,000 or less, and removed this excess by the end of the year, they would not have to pay excess transfer balance tax.
With 31 December just around the corner, DBA Lawyers director Daniel Butler said SMSF practitioners should ensure their clients have removed these excess amounts out of the pension account.
This transitional relief, he explained only applies to a pension that was in place as of 30 June this year.
“So you cannot get that $100,000 leeway in general, it had to be a pension that was in place as of 30 June this year,” he said.
“It's just worthwhile noting that, because some of your clients may need to rely on that.”