Family Law Splitting Interest Rate for 2015/16

The base amount adjustment rate for 2015/16 is 5.3%.  This is a very slight reduction compared to the adjustment rate for 2014/15 which was 5.4%.  This adjustment rate applies to base amounts in respect of superannuation interests in SMSFs.  

When superannuation interests in SMSFs are subject to a base amount split under the Family Law splitting provisions, the base amount must be adjusted for the adjustment period.  This means that the dollar value of the base amount will be increased – this compensates the beneficiary of the payment split for delayed payment and also provides an incentive to the member whose interest is subject to the payment split to cash out the payment split (as they will bear the increased amount).

If the adjustment period precisely corresponds to the 2015/16 financial year the adjustment rate is 5.3% compounded daily.  If the adjustment period is entirely within the 2015/16 financial year (ie less than 12 months) then it is adjusted by 5.3% on a daily basis for the number of days.

If the adjustment period straddles two financial years say, 2014/15 and 2015/16, then the adjustment rate is a combination of 5.4% (adjustment rate for 2014/15) and 5.3% (adjustment rate for 2015/16) based upon the number of days of the adjustment period which occurs in the 2014/15 financial year and the number of days which occurs in the 2015/16 financial year.  In either case the respective adjustment rate is applied on a daily basis.

If the adjustment period spans two or more financial years – then the similar rules apply.