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Tax certainty after death for super funds

Recent government amendments have provided tax certainty for superannuation funds upon the death of members in receipt of a superannuation income stream.

This amendment effectively allows a superannuation fund trustee to dispose of pension assets on a tax-free basis to fund the payment of death benefits.

Also, the meaning of ‘superannuation income stream benefit’ now allows the superannuation fund to continue to be entitled to the earnings tax exemption in the period of the member’s death until their benefits have been paid out by:

-paying them out as a lump sum

-and/or commencing a new income stream

This is subject to the benefits being cashed as soon as possible following the member’s death.

This amendment also allows the tax-free proportion of that superannuation income stream to be used in calculating the tax components of those benefits.

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Transition to retirement

November 25, 2020

The transition to retirement (TTR) strategy allows you to access some of your super while you continue to work.

You are able to use the TTR strategy if you are aged 55 to 60. You can use it to supplement your income if you reduce your work hours or boost your super and save on tax while you keep working full time.

TTR can help ease your mind as you transition into retirement but it can be a bit complex. Before you choose whether you want to use TTR to reduce work hours or save on tax, or even if you want to use TTR altogether, you should figure out how this will impact all aspects of your finances.