Due to the recent spike in inflation, the Transfer Balance Cap - or TBC - is set to increase a whopping $200,00; from $1.7 million to $1.9 million, from 1 July 2023. (The step up to $1.9 million is expected and very likely to occur based on current rules and inflation rates but has not yet been finalised).
Someone who has not and will not have commenced a retirement phase income stream, before 1 July 2023, will enjoy the full benefit of a $200,000 increase to their TBC.
Individuals who are considering commencement of a retirement phase income stream, may be better off deferring the commencement until after 1 July 2023 so they can lock in the maximum increase to their personal TBC.
In addition, because of the increase to the general TBC, the thresholds for non-concessional contributions (NCC) are also expected to increase from 1 July 2023:
| Maximum NCC cap using
bring forward rule |
Current |
Expected from 1 July 2023 |
| $330,000 |
< $1.48 Million |
< $1.68 Million |
| $220,000 |
$1.48 - $1.59 Million |
$1.68 - $1.79 Million |
| $110,000 |
$1.59 - $1.7 Million |
$1.79 - $1.9 Million |
| NIL |
> $1.7 Million |
> $1.9 Million |
Unfortunately, a person who has already fully utilised their TBC before 1 July 2023, will not receive any personal benefit from the upcoming increase to the General TBC.
If you are thinking of commencing an income stream between now and the end of the financial year you should speak with your adviser first to make sure you maximise your options and opportunities.
