Super split on Divorce - can pay Cash instead of Super transfer?

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 · Accepted Answer

Bruce4Tax · Answer

My client Jack and Jill are separating, and a court order to split the super may be issued soon. In the order, Jill has to pay $250,000 of super from her super account to Jack's super. However, Jill does have sufficient cash saved in her bank account, and can pay cash $250,000 (bank transfer) to Jack. Questions: 1. Is this allowed? I mean can Jill pay cash $250,000 to Jack instead of splitting the super? 2. If she can, will this be taxable income in the hands of Jack? If they agree in between about this cash transfer, and Jack does not claim super from Jill in the court, means there may not be any court order at all, so in that case, $250,000 received by Jack from Jill, would be taxable to Jack? Court orders need to be followed - so if they want to do it differently, then they need to change to content of the court order. This means that they need to talk to their lawyers. $ 250 K tax would not be taxable.

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