CGT cap hike of $50k expected in 2020–21

The calculations only index the cap in $2,500 increments, so the average weekly ordinary time earnings (AWOTE) indexation factor of 1.033 for 2020–21 was insufficient to trigger an increase to $27,500.

At the current rate of wages growth, the concessional cap is not expected to increase to $27,500 until 1 July 2021.

The calculations also revealed that the non-concessional contributions cap is also unchanged at $100,000 for 2020–21 (or $300,000 over three years, subject to the other eligibility requirements).

Thomson Reuters senior tax writer Stuart Jones said that while the super guarantee rate is not scheduled to increase from 9.5 per cent to 10 per cent until 1 July 2021, the “maximum contribution base” will rise to $57,090 per quarter for 2020–21 (up from $55,270).

“This quarterly maximum represents a per annum equivalent of $228,360 for 2020–21,” he said.

Mr Jones also said that the government co-contribution “lower income threshold” is $39,837 for 2020–21, while the “higher income threshold” is $54,837.

Further, the superannuation lump sum low rate cap and “ETP cap” will increase to $215,000 for 2020–21 (up from $210,000), while the untaxed plan cap will increase to $1.565 million.

“The tax-free amount for a genuine redundancy will increase to $10,989 (base amount) for 2020–21 plus $5,496 for each whole year of service,” Mr Jones said.

“The general transfer balance cap will remain at $1.6 million for 2020–21. This also means that the defined benefit income cap of $100,000 p.a. is unchanged. Likewise, the total superannuation balance threshold of $1.6 million is unchanged for 2020–21.

“Indexation of the general transfer balance cap from $1.6 million to $1.7 million is expected to occur on 1 July 2021, provided that the All Groups CPI figure for the December 2020 quarter is 116.9 or higher (it was 116.2 for the December 2019 quarter).”