ATO death benefit interpretation
Self-managed superannuation fund (SMSF) specialist Cavendish Superannuation has pointed out the Australian Taxation Office’s (ATO’s) continuing interpretation regarding the handling of superannuation pension accounts upon the death of a member.
According to Cavendish, the ATO has confirmed that in the absence of a continuing pension beneficiary, a superannuation pension account becomes an accumulation account on the death of a member.
It said this then caused the account to pay tax on both income and capital gains from the date of death – something that “may create significant tax liabilities in the fund in addition to any that many be incurred when payments are made from the fund”.
Cavendish said the ATO had first stated such an interpretation in 2004, but submissions relating to possible changes to the interpretation could be made until 26 August.
AUTHOR
Mike Taylor
Recommended for you
AMP is to launch a digital advice service to provide retirement advice to members of its AMP Super Fund, in partnership with Bravura Solutions.
Unveiling its performance for the calendar year 2024, AMP has noted a “careful” investment in bitcoin futures proved beneficial for its superannuation members.
SuperRatings has shared the median estimated return for balanced superannuation funds for the calendar year 2024, finding the year achieved “strong and consistent positive” returns.
The second tranche of DBFO reforms has received strong support from superannuation funds and insurers, with a new class of advisers aimed to support Australians with their retirement planning.
