SMSF: TBC increase not as easy as ABC

The increase of the transfer balance cap from $1.9 million to $2 million is not as simple to understand as it seems. In this SMSF Adviser podcast, hosts Keith Ford and Aaron Dunn discuss the implications of the TBC rise implemented at the start of the new financial year with industry stalwart David Busoli.

While this shift appears straightforward, it brings complexities, particularly for existing pensioners, due to the intricacies of proportional indexation. Busoli explains how proportional indexation is a critical concept in understanding how the TBC affects individuals and how, for people just starting their pension phase, the indexation process presents several challenges.

Listen as they discuss:

• The necessity for accurate data to ensure proper management of transfer balance accounts.

• Broader implications of the TBC changes, including the impact on non-concessional contributions.

• The ongoing challenges within the SMSF sector, particularly in managing the intricacies of the transfer balance cap and ensuring accurate reporting.

• Division 7A and its implications for limited recourse borrowing arrangements within SMSFs.