The amount of money that can be transferred to a tax-free retirement account will increase to $2m on 1 July 2025.
The transfer balance cap – the amount that can be transferred to a tax-free retirement account – is indexed to the Consumer Price Index (CPI) released each December. If inflation goes up, the general transfer balance cap (TBC) is indexed in increments of $100,000 at the start of the financial year.
In December 2024, the inflation rate triggered an increase in the cap from $1.9m to $2m.
Everyone has an individual transfer balance cap. If you have started a retirement income stream, when indexation occurs, any increase only applies to your unused transfer balance cap.
If you are considering retiring, either fully or partially, indexation of the transfer balance cap provides a one-off opportunity to increase the amount of money you can transfer to your tax-free retirement account. That is, if you start taking a retirement income stream for the first time in June 2025, your transfer balance cap will be $1.9m but if you wait until July 2025 your transfer balance cap will be $2m, an extra $100,000 tax-free.
If you are already taking a retirement income stream, indexation applies to your unused TBC – so, you might not benefit from the full $100,000 increase on 1 July 2025.
How do I find out what my cap is?
Your superannuation fund reports the value of your superannuation interests to the Australian Taxation Office (ATO).
You can view your transfer balance account, including available cap space and account transactions, on ATO online services.
- Sign in to myGov.
- Select Australian Taxation Office.
- Select Super, then Information, then Transfer Balance Cap.
How we can help:
Please contact us if you require any clarification on superannuation rules. Our specialist Superannuation accountants have extensive experience in the tax and compliance issues specific to super and self-managed super funds. With our expert guidance, you’ll have peace of mind that you are ticking all the right boxes and avoiding any risk of non-compliance.
You can find out more about working with Marsh & Partners here. As your Absolute.Account.Ability partner we’re on a mission to make your business life better. If you need high-level support for your business, get in touch with our specialists on 07 3023 4800 or at mail@marshpartners.com.au.
This article is intended to give an overview and is not a substitute for financial advice.
