Adviser Update

$1.6m Balance Transfer Cap

Have you thought about how you are going to handle the $1.6 million pension cap for your clients?

The transparent and flexible nature of AMG Super means clients will have the full flexibility to choose exactly how they want to structure their account and which assets to keep in pension and which to transfer to accumulation.

As you would be aware, from 1 July 2017, the Government will introduce a $1.6 million cap on the total amount of superannuation that can be held in or transferred to a tax-free retirement account. This means those members already in pension phase as at 1 July 2017 with balances in excess of $1.6 million will need to either:

  • transfer the excess back into an accumulation superannuation account; or
  • withdraw the excess amount from their superannuation.

AMG Super is able to allow members to make an election for which holdings they would like to transfer back to accumulation and which they want to retain in pension phase.

Transitional CGT Relief

In addition, for those assets transferred back to accumulation, clients will be able to elect, on a per holding basis, whether they would like to:
1) Keep the same cost base (default option) – under this election, the tax base of the asset transferred to the accumulation phase is retained, such that it is the same as the tax base of that asset in the pension phase.
2) Choose to reset the cost base – under this election, there is a deemed sale and re-acquisition of the asset at market value. Therefore, the tax base of the asset is reset at its market value, and any future gains or losses are based on the movement in the value of the asset in the accumulation phase.

Transition Period

You are able to transfer holdings in excess of $1.6m back to accumulation at any time prior to 1 July 2017. Please note that transitional rules also apply if the excess balance is less than $100K as at 1 July 2017.

More Information

If you would like more information on how take advantage of this, including instruction on how to make the election please contact Terry Constable, Business Development Manager on (07) 3228 2632 or terry.constable@amgsuper.com.au.

Getting control of your super is easy with AMG

Get in contact

PO Box 3528, Tingalpa DC, QLD 4173

1300 264 264

info@amgsuper.com.au