Hi,
The deceased estate has received death benefit payouts from life Insurance policies held outside Superannuation.
Does the trustee of the deceased estate pay tax on the death benefit amounts distributed to non-dependents beneficiaries of the estate? Or is it tax free irrespective of dependent/non-dependent status as the policy is held outside Superannuation.
Thanks
Hi @Shanti_K,
Where a life insurance policy is held outside superannuation, the treatment is different.
Death benefits from life insurance policies held outside super are not assessable income, regardless of whether the beneficiary is a dependent or non‑dependent.
This means:
The key distinction is that the dependent/non‑dependent tax rules mainly apply to superannuation death benefits, not life insurance policies held personally or outside super.
In your situation, the main point is that the payouts are from policies held outside super, so they’re generally treated as capital receipts rather than income for tax purposes.
Or is it tax free irrespective of dependent/non-dependent status as the policy is held outside Superannuation.
Should be.
Hi @Shanti_K,
Where a life insurance policy is held outside superannuation, the treatment is different.
Death benefits from life insurance policies held outside super are not assessable income, regardless of whether the beneficiary is a dependent or non‑dependent.
This means:
The key distinction is that the dependent/non‑dependent tax rules mainly apply to superannuation death benefits, not life insurance policies held personally or outside super.
In your situation, the main point is that the payouts are from policies held outside super, so they’re generally treated as capital receipts rather than income for tax purposes.
22 Apr 2024 · 6 min read time
15 Apr 2026 · 5 min read time
15 Apr 2026 · 4 min read time
16 views
2 replies