“From 1 July 2025, the general TBC will increase from $1.9 million to $2 million due to CPI growth over the past two years. This change impacts individuals with retirement-phase income streams, making it crucial for SMSF professionals to ensure their clients remain compliant while maximising strategic opportunities.”

The TBC limited the superannuation savings that can be transferred into a tax-free retirement account, and the increase would allow retirees to increase the amount of their tax-free pension, Tokhi said.

“This represents an opportunity for SMSF professionals to proactively explore advanced strategies to optimise tax benefits and enhance retirement income.”

“One of those strategies would be to delay pension commencement as individuals nearing retirement may benefit from waiting until after 1 July 2025 to commence their pension, allowing more assets into the tax-free retirement phase.”

Another strategy that could be considered is super equalisation and contribution splitting, he said.

“[This can be used] if one spouse's balance approaches $2 million while the other's balance is lower, strategic planning could optimise tax advantages.”

With the increase in the TBC, Tokhi said now was the time to review clients’ current and projected transfer balance positions and advise on pension commencement timing and non-concessional contributions (NCC) opportunities.

“It is also important to think about leveraging the higher cap. Retirees starting a retirement phase income stream on or after 1 July 2025 will have a full TBC of $2 million.”

SMSF professionals should also ensure they and their clients are meeting all compliance obligations by staying on top of transfer balance account reports regulations.

“The TBC increase also affects death benefit pensions, influencing how transfer balance accounts are calculated, so it is also good to look at overall estate planning,” Tokhi said.

“The TBC increase affects contributions, with the TSB test determining non-concessional contributions eligibility. While concessional and NCC caps remain unchanged, the three-year bring-forward rule applies to a higher TBC. SMSF professionals should consider delaying NCCs until after 1 July 2025 for larger contributions.”