The transfer balance cap (TBC) was introduced as part of the 2017 super reforms to limit the amount a person could transfer to a retirement phase pension, for example an account-based pension. The transfer balance cap started at $1.6m, however, legislation allows for the indexation of the cap in $100,000 increments in line with the consumer price index (CPI). There has been speculation as to when the first $100,000 increase will occur, requiring the CPI to be at least 116.9 for the December 2020 quarter1.
Well, that speculation is now over with the release today (27 January 2021) of the CPI for December 2020 quarter of 117.2. Based on current legislation and rules, this means the general transfer balance cap will increase to $1.7m on 1 July 2021 and from this date there will be no single transfer balance cap which applies to all individuals.
subscribers can read our full article here: Transfer balance cap to increase from July 2021
For more information on the interpretation from the ATO please click here. https://www.ato.gov.au/Super/Sup/Transfer-balance-cap-indexation/
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