What is the low cap rate amount for 2024/25 financial year? And why has it not been published?

Each 1 July various superannuation thresholds are updated by the ATO. For the 2024/25 the concessional contributions cap increased from $27,500 to $30,000 and the non-concessional contributions cap increased from $110,000 to $120,000. The CGT contribution cap also increased from $1,705,000 to $1,780,000. But the low rate cap amount which was $235,000 for the 2023/24 financial year did not increase – in fact, it was not even published by the ATO. What is going on?

The reason for the non-publication of the low rate cap amount is simply that the need for the low rate cap amount has from 1 July 2024 ceased given that the preservation age is now age 60. (Technically, anyone born on or before 30 June 1964 still has a lower preservation age but this has no practical impact as they will be aged 61 or more as at 1 July 2024.)

So from 1 July 2024 the taxable component of superannuation member benefits paid as lump sums from SMSFs will be either tax free (if paid on or after age 60) or taxable (if paid before age 60 but capped at a maximum rate of 20%). While the tax free component is and remains tax free whether paid before or after age 60.

The low-rate cap amount applied to the taxable portion of superannuation member benefits paid as lump sums in the period between preservation age and age 60 and had the effect of ensuring that a zero rate of tax applied to the benefit if the benefit did not exceed the low-rate tax cap. The taxable portion of lump sum benefits received in that period between preservation age and age 60 which exceeded the cap were taxable but capped at a maximum rate of 15%.