Transfer Balance Cap Penalties
It is important that you keep a look at your transfer balance cap because if the time limit exceeds then the person has to bear the penalties by accepting seven percentage points over the RBA 90 Day Bank Accepted Bill rate and it will be compounded daily and eventually credited in their bank along with the transfer balance through the general interest charge (GIC).
What is a Transfer Balance Cap?
A Transfer Balance Cap (TBC) is a limit placed on the amount of superannuation that can be transferred from an accumulation account into a retirement income stream account. The TBC was introduced by the Australian Government on 1 July 2017 in order to manage the sustainability of the retirement income system. The TBC is currently set at $1.6 million and is indexed in line with the Consumer Price Index (CPI).
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