{"id":"C2016A00080","name":"Superannuation (Excess Transfer Balance Tax) Imposition Act 2016","slug":"superannuation-excess-transfer-balance-tax-imposition-act-2016","collection":"act","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":"80 of 2016","makingDate":null,"administeringDepartment":null,"currentVersion":{"id":436291,"registerId":"C2016A00080-fast-fetch-1775953537080","compilationNumber":null,"startDate":"2026-04-12","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Superannuation (Excess Transfer Balance Tax) Imposition Act 2016","content":"---\nmeta-content-style-type: text/css\nmeta-content-type: application/xhtml+xml; charset=utf-8\n---\n\n?xml version=\"1.0\" encoding=\"utf-8\" standalone=\"no\"?>\n\n![](image.001.png)\n\n \n\n \n\n \n\n \n\n \n\n \n\nSuperannuation (Excess Transfer Balance Tax) Imposition Act 2016\n\n \n\nNo. 80, 2016\n\n \n\n \n\n \n\n \n\n \n\nAn Act to impose excess transfer balance tax, and for related purposes\n\n \n\n \n\n \n\nContents\n\n1 Short title\n\n2 Commencement\n\n3 Definitions\n\n4 Imposition of tax\n\n5 Amount of tax\n\n6 Severability\n\n \n\n![](image.001.png)\n\n \n\n \n\nSuperannuation (Excess Transfer Balance Tax) Imposition Act 2016\n\nNo. 80, 2016\n\n \n\n \n\n \n\nAn Act to impose excess transfer balance tax, and for related purposes\n\n[Assented to 29 November 2016]\n\nThe Parliament of Australia enacts:\n\n1  Short title\n\n  This Act is the Superannuation (Excess Transfer Balance Tax) Imposition Act 2016.\n\n2  Commencement\n\n (1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.\n\n \n\n- Commencement information\n- Column 1 Column 2 Column 3\n- Provisions Commencement Date/Details\n- 1. The whole of this Act At the same time as Schedule 1 to the Treasury Laws Amendment (Fair and Sustainable Superannuation) Act 2016 commences.However, the provisions do not commence at all if that Schedule does not commence. 1 January 2017\n\n\nNote: This table relates only to the provisions of this Act as originally enacted. It will not be amended to deal with any later amendments of this Act.\n\n (2) Any information in column 3 of the table is not part of this Act. Information may be inserted in this column, or information in it may be edited, in any published version of this Act.\n\n3  Definitions\n\n  In this Act:\n\nexcess transfer balance period has the same meaning as in the Income Tax Assessment Act 1997.\n\nnotional earnings means the sum worked out under subsection 294‑230(3) of the Income Tax Assessment Act 1997 for the excess transfer balance period.\n\n4  Imposition of tax\n\n  Excess transfer balance tax payable under section 294‑230 of the Income Tax Assessment Act 1997 is imposed.\n\n5  Amount of tax\n\n (1) The amount of the excess transfer balance tax is:\n\n (a) if the circumstances mentioned in subsection (2) apply—30% of the person’s notional earnings for the excess transfer balance period; or\n\n (b) in any other case—15% of the person’s notional earnings for the excess transfer balance period.\n\n (2) For the purposes of paragraph (1)(a), the circumstances are:\n\n (a) the excess transfer balance period starts on or after 1 July 2018; and\n\n (b) the person has previously been liable to pay excess transfer balance tax for an excess transfer balance period starting on or after 1 July 2018.\n\n6  Severability\n\n  If, apart from this section, section 4 would impose, in relation to a person, a tax the imposition of which in relation to the person would exceed the legislative power of the Commonwealth, section 4 has effect as if it did not impose that tax in relation to the person.\n\n \n\n \n\n \n\n \n\n[Minister’s second reading speech made in—\n\nHouse of Representatives on 9 November 2016\n\nSenate on 23 November 2016]\n\n \n\n(172/16)\n\n \n","sortOrder":0}],"analysis":{"flash_summary":{"complexity_score":5,"scope_assessment":{"changed":false,"description":"The text of the Act as provided sets out a narrow, specific change: imposition of excess transfer balance tax with defined percentage rates and cross‑references to calculation rules in the ITAA 1997 (s.3–5). The document supplied does not show any amendment history or indication that the Act’s scope has been changed from an earlier version; nothing in the text itself indicates a change from an original intent or scope beyond what is enacted in the sections cited."},"complexity_factors":["Cross-references to the Income Tax Assessment Act 1997 for key definitions and the calculation of notional earnings (s.3, s.4) rather than defining them within this Act","Two-tier rate structure that depends on historical liability tracking (s.5(1)–(2))","Contingent commencement tied to another legislative instrument (s.2)","Small text with outsized dependence on external, technical tax rules (potentially making implementation reliant on detailed ITAA rules and ATO guidance) (s.3, s.4)","Severability provision that anticipates constitutional or validity challenges creates legal uncertainty for application to particular persons (s.6)"],"plain_english_summary":"What this law does (mechanics)\n\n- The Act imposes a tax called the excess transfer balance tax. It makes that tax payable under section 294‑230 of the Income Tax Assessment Act 1997 (ITAA 1997) (s.4).\n- The tax base is the person’s \"notional earnings\" for an \"excess transfer balance period\" (these terms are defined by cross‑reference to the ITAA 1997; see s.3). The Act does not itself set out how to calculate notional earnings — it points to subsection 294‑230(3) of the ITAA 1997 (s.3).\n- The percentage rate applied to those notional earnings is either 15% or 30% depending on whether the person has previously been liable for the same tax for a period starting on or after 1 July 2018. If the period starts on or after 1 July 2018 and the person has a prior liability of that kind, the rate is 30%; otherwise the rate is 15% (s.5(1)–(2)).\n- The Act’s commencement is linked to the commencement of Schedule 1 to the Treasury Laws Amendment (Fair and Sustainable Superannuation) Act 2016; the table in s.2 records that connection and a 1 January 2017 reference. The provisions do not commence if that Schedule does not commence (s.2).\n- If a court finds the Commonwealth lacks power to impose the tax in relation to a particular person, the Act contains a severability rule so section 4 will be treated as if it did not impose the tax on that person (s.6).\n\nWho is affected and who pays\n\n- The immediate payers are persons who are identified as liable under section 294‑230 of the ITAA 1997 — i.e. persons who have an excess transfer balance period and associated notional earnings by the ITAA 1997 definitions (s.4; s.3). The Act imposes the tax amount on those notional earnings at the rates set out in s.5.\n- The Commonwealth collects the tax because the Act imposes an enforceable tax (s.4). The Act relies on the ITAA 1997 for key definitions and calculation rules (s.3).\n\nWhy it matters (practical effects, incentives and trade‑offs)\n\n- The Act increases the financial cost of having an excess transfer balance by applying a specified percentage to the notional earnings for the excess transfer balance period (s.5). That creates a direct monetary penalty on the taxable amount identified through the ITAA 1997 rules (s.3, s.4, s.5).\n- There are two rates, and the higher 30% rate applies to persons who have previously incurred the tax for a period starting on or after 1 July 2018 (s.5(1)(a), s.5(2)). Mechanically, this requires recordkeeping and historical tracking of prior liabilities when calculating the tax rate that applies in a given period (s.5(2)(b)).\n- Implementation depends on cross‑references to the ITAA 1997 for the definition of the taxable period and the calculation of notional earnings (s.3). That linkage concentrates complexity in those cross‑referenced provisions rather than in this short Imposition Act.\n\nCosts, compliance burdens and discretion\n\n- The concrete cost to affected persons is the tax amount (15% or 30%) applied to the notional earnings for the relevant excess transfer balance period (s.5).\n- Compliance requires identifying an excess transfer balance period and calculating notional earnings under the ITAA 1997 (s.3). It also requires establishing whether the person has prior liability for the higher rate to determine whether 30% applies (s.5(2)(b)). Those steps create administrative burden for taxpayers and for any agencies or intermediaries required to apply or report the calculation.\n- The Act contains a constitutional‑risk mitigation mechanism: if imposing the tax would exceed the Commonwealth’s legislative power for a particular person, section 4 is read down so it does not impose the tax in that person’s case (s.6). That creates a narrowly‑targeted legal safety valve but also signals potential litigation or validity issues could affect collection in some circumstances.\n\nImplementation risks and dependencies\n\n- The Act’s operation depends directly on provisions in the ITAA 1997 (s.3, s.4). Any interpretive or administrative issues in those ITAA provisions (for example, how notional earnings are worked out) will determine how this tax is calculated in practice.\n- Commencement is contingent on another legislative schedule (s.2). That means the Act’s timing and operation depend on the separate legislation specified in s.2.\n\nNotes on what the Act does not itself say\n\n- The Act is short and does not include policy statements, revenue estimates, or administrative details in the text provided. It does not set out how the tax is to be administered operationally; instead it imposes the tax and sets the percentage rates (s.4–5). Definitions and calculation steps are left to the ITAA 1997 (s.3)."},"kimi_summary":{"content_quality":"ok","complexity_score":2,"scope_assessment":{"changed":false,"description":"This Act remains tightly focused on its original purpose: imposing a specific tax on excess transfer balances. It has not expanded beyond this narrow function since enactment. The Act deliberately defers all substantive rules to the Income Tax Assessment Act 1997, maintaining its minimalist design."},"complexity_factors":["Extremely short statute—only 6 sections","Minimal defined terms (only 2 defined in the Act itself: 'excess transfer balance period' and 'notional earnings')","Heavy reliance on external legislation—all substantive calculation rules are in the Income Tax Assessment Act 1997","Simple binary rate structure (15% vs 30%) with clear triggering condition","No nested exceptions or complex conditional logic","Single purpose statute with straightforward severability clause"],"plain_english_summary":"This law creates a tax penalty for people who have too much money in their retirement pension accounts.\n\n**What it does:**\n- When Australians retire, they can move their superannuation (retirement savings) into a 'retirement phase' account where earnings are tax-free. However, there's a limit on how much can go in—this is called the **transfer balance cap**.\n- If someone puts more than the cap into these tax-free retirement accounts, they have an **excess transfer balance**.\n- This Act imposes a tax on the 'notional earnings' (the investment profits you would have made on the excess amount) during the time the excess remained in the account.\n\n**Who it affects:**\n- Retirees with large superannuation balances who exceed the $1.6 million transfer balance cap (indexed over time).\n- People who accidentally or deliberately keep too much in their tax-free retirement pension accounts.\n\n**How much tax:**\n- **15%** of the notional earnings for first-time breaches.\n- **30%** of the notional earnings if you've breached the cap before (from 1 July 2018 onwards).\n\n**Why it matters:**\nThis is a deterrent to stop wealthy Australians from using superannuation as a tax-free savings vehicle beyond reasonable retirement needs. It ensures the tax concessions for retirement savings are targeted appropriately."}},"importantCases":[],"_links":{"self":"/api/acts/superannuation-excess-transfer-balance-tax-imposition-act-2016","history":"/api/acts/superannuation-excess-transfer-balance-tax-imposition-act-2016/history","analysis":"/api/acts/superannuation-excess-transfer-balance-tax-imposition-act-2016/analysis","conflicts":"/api/acts/superannuation-excess-transfer-balance-tax-imposition-act-2016/conflicts","importantCases":"/api/acts/superannuation-excess-transfer-balance-tax-imposition-act-2016/important-cases","documents":"/api/acts/superannuation-excess-transfer-balance-tax-imposition-act-2016/documents"}}