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Good Afternoon,
A fund has just signed a contract to sell land for $20mil. The land was originally purchased for $1.6mil approx. six years ago. One member commenced a transition to retirement pension around eight years ago with a purchase price of $750,000. This member will be eligible to transfer the TRIS to a TRIS in retirement, prior to the land settling. Obviously the value of the fund will increase given the land value has increased significantly, which in turn will increase the value of the pension account to approximately $4mil.
Are there any issues that the pension account will have a balance of around $4mil? Is it ok to transfer the TRIS to a TRIS in retirement when the value will be this high, or does the pension account need to reflect the Transfer Balance Cap when transferring to the TRIS in retirement.
Your assistance would be greatly appreciated.
Thank you.
Faye
Thank you so much for your prompt response, greatly appreciated.
Hi Faye
Yes if a TRIS converts to a TRIS in retirement phase this will be a reportable event re the transfer balance cap at that date.
The Fund's value should be determined at the date of conversion.
Given the values involved I would recommend they get professional tax / superannuation advice re their pension position.
The ATO has guidance re TRIS's at GN 2019/1 - Changes to transition-to-retirement income streams at:
https://www.ato.gov.au/law/view/view.htm?docid=%22GDN%2FGDN20191%2FNAT%2FATO%2F00001%22
Refer below example in the guidance note that is similar to your query:
Thanks
SMSF AAA