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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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News

Reviewing your super

July 19, 2018

The ATO is encouraging taxpayers to review their super this tax time.

Finding lost super or consolidating any unwanted multiple accounts can make a massive difference to your nest egg.

There is over $18 billion in lost and unclaimed super. Those who have changed their name, address, job or lived overseas are at high risk of having lost super.

During the last five years, more than $10.7 billion of super has been consolidated from over 2.1 million accounts through ATO online services.

The ATO is also reminding taxpayers that the new super deduction is available. Most people under 75 years of age can claim a tax deduction for personal after-tax super contributions.

Personal super contributions deductions provide a level of flexibility for young people that change jobs frequently, self-employed contractors, small business employees, freelancers and people whose employers do not offer salary sacrifice arrangements.

To claim a deduction for any personal super contributions made in 2017/18, you must lodge a notice of intent to claim a deduction with your fund and receive a confirmation letter from them before lodging your tax return.