TBC set for double indexation from 1 July
The general transfer balance cap is set to increase to $1.9 million from 1 July based on CPI figures released today.
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In CPI figures released by the ABS today, the All Groups CPI figure for the December quarter was 130.8.
With the All Groups CPI figure above 130.7, the general transfer balance cap is set to index to 1.9 million for 2023-24 income year.
Last week, BT technical consultant Tim Howard predicted the general transfer balance cap was “almost certain” to be raised to $1.9 million.
For advisers with clients planning to start a retirement income stream before 30 June 2023, Mr Howard said it may be worth considering if this will lead to the best outcome for them.
With the total super balance threshold linked to the general transfer balance cap, this threshold will also rise to $1.9 million from 1 July 2023.
Mr Howard said it is also important for advisers to therefore consider the impact of the indexation increase on their clients contribution strategies.
“The TSB is used, amongst other things, to determine the level of non-concessional contributions that can be made by a client into super in a particular income year,” Mr Howard explained.