Following the December 2024 quarter Consumer Price Index (CPI) release, it has been confirmed that the general Transfer Balance Cap (TBC) will increase from $1.9 million to $2 million starting 1 July 2025.
What Is the Transfer Balance Cap?
The TBC is a lifetime limit on the amount an individual can move from a superannuation accumulation account into the tax-free retirement phase. It ensures tax benefits from superannuation are fairly distributed and prevents excessive amounts being sheltered tax-free.
🧑‍🤝‍🧑 With a $2M cap, couples can hold up to $4 million combined in the tax-free retirement phase.
TBC Historical Table (Simplified to Text):
| Financial Year | General TBC |
|---|---|
| 0172–2020 | $1.6 million |
| 2021–2022 | $1.7 million |
| 2023–2025 | $1.9 million |
| 2025–2026 | $2.0 million |
Other Related Threshold Changes (Effective 1 July 2025)
Defined Benefit Income Cap: Increases from $118,750 to $125,000 per annum.
Spouse Contribution Tax Offset Cap: Increases from $1.9M to $2.0M.
Super Co-contribution Eligibility Cap: Also increases to $2.0M.
Planning Tip
If your super exceeds $1.9M and you’re planning to begin drawing a retirement income, you may benefit from waiting until 1 July 2025. However, this depends on other tax and investment factors—consult your adviser.
🔔 Note: The full $2M cap only applies if you haven’t previously used your TBC before 1 July 2025.
Need help? Speak to the SWU Group NOW!:financialsuccess@simonwu.com.au