March 2021 Newsletter

Please click on the following link to view our monthly accounting/tax newsletter for

March – 2021

We would like to highlight the following articles in this month’s newsletter:-

Super transfer balance cap increases from 1 July 2021

The transfer balance cap is a lifetime limit on the total amount of superannuation that can be transferred into retirement phase income streams, including most pensions and annuities. The transfer balance cap will increase to $1.7 million (previously $1.6 million) on 1 July 2021. The general transfer balance cap increases in increments of $100,000 in line with the consumer price index (CPI) and as such, the recent release of the December 2020 quarter CPI figures lead to the first increase in the transfer balance cap since it was introduced on 1 July 2017.

If an individual had a transfer balance account before 1 July 2021, but has not used the full amount of their transfer balance cap, their personal cap will be proportionally increased by multiplying their unused cap percentage of their transfer balance account by $100,000. If a person has already used 100% of their available cap space, their personal transfer balance cap will not be subject to further indexation on 1 July 2021.

If you’re nearing retirement and have a large superannuation account balance, it may be wise to delay until 1 July 2021 to take advantage of the upcoming pension transfer cap increase from $1.6 million to $1.7 million due to indexation.

Single Touch Payroll (STP) – Closely held employees

From 1 July 2021 the STP exemption small employers (19 or fewer employees) had for closely held employees will expire. This means that all small employers will need to report wages paid to closely held employees via STP from 1 July 2021.

A closely held employee is an individual who is directly related to the entity from which they receive a payment. For example:

  • family members of a family business;
  • directors or shareholders of a company; and
  • beneficiaries of a trust.

Please do not hesitate to contact us if you have any queries in relation to your tax and accounting matters.