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Loz83(Newbie)Newbie
6 Feb 2023

My mum recently passed away at 67 leaving behind a super account. She only opened the super account in 2019 and deposited a lump sum of $100 000 into an income stream, which was her inheritance from my fathers estate. That is pretty much how much is still in there. I am a non dependent beneficiary. The superannuation company is telling me that the death benefit will be taxable, but I’m not so sure.

Also, if it is taxable, will the lump sum impact the tax I pay on the rest of my wage, as it would move me up to the next tax bracket, or is the death benefit simply taxed at the 17/32% rate and my income taxed separately at my MTR?

Thank you in advance.

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2,270 views
4 replies

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Most helpful reply

Bruce4Tax(Taxicorn)Taxicorn
6 Feb 2023

The death benefit will taxable only to the extent that there is a "taxed element" in the payment - this will not include the original $ 100 K deposit.


The super fund will provide a payment summary and deduct 17% tax = correct amount.

The benefit is taxed at 17% max. so does not affect your marginal rate.


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Most helpful reply

Bruce4Tax(Taxicorn)Taxicorn
6 Feb 2023

The death benefit will taxable only to the extent that there is a "taxed element" in the payment - this will not include the original $ 100 K deposit.


The super fund will provide a payment summary and deduct 17% tax = correct amount.

The benefit is taxed at 17% max. so does not affect your marginal rate.


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JodieR_ATO(Community Support)Community Support
8 Feb 2023

Hi @Loz83,


We're sorry to hear of the passing of your mum.


In regard to receiving a super death benefit as @Bruce4Tax advised, tax payable depends on the taxable components of the death benefit. You can view non-dependent receiving a super death benefit and tax rate from here. Any tax-free amount won't increase your taxable income or your tax payable.


Your marginal tax rates will apply, and your super lump sum will be taxed according to the table on the link provided.

quantumflux1000(I'm new)I'm new
19 Mar 2023

@Bruce4Tax , My wife, a U.S. citizen, is currently in Sydney to close the estate of her dad, who was a resident of Austraia. Dad left a will with a certificate of Deposit with my wife as sole beneficiarty. I understand Australia does not inpose an inheritance tax, But, I am gettting conflicting advice that a new inheritance tax of 0.0004 per $1-million-AUD might be coming into effect, Is this accurate/true?? Thank you

DanielleATO(Community Support)Community Support
22 Mar 2023

Hi @quantumflux1000,


We cannot comment on any potential changes until they pass through legislation.


You are correct that as of right now, there are no inheritances or estate taxes in Australia. However, you may have tax obligations for the assets you inherit:

  • capital gains tax may apply if you dispose of an asset inherited from a deceased estate
  • income tax applies as usual to any dividends or rental income from shares or property you inherited.


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