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Transfer balance cap

Excess transfer balance tax

Section: 19.15

Excess transfer balance tax applies to notional earnings at the standard rate of 15%, as it is intended to neutralise the advantage of the tax-free pension environment.

However a tax rate of 30% applies to additional breaches to discourage client's from intentionally breaching the cap.

The ATO will issue an excess transfer balance tax assessment imposing the above mentioned tax liability after the breach has been rectified. An excess transfer balance tax assessment is due and payable 21 days after the ATO issues the assessment.

Where the amount of excess transfer balance tax is not paid by the required time, the general interest charge will start accruing on the unpaid amount.

Last modified: Thursday, July 25, 2019