• 282 Online
  • 20268 Members
  • 22593 Posts

ATO Community

Payment of super death benefit to estate following death of pension member

Ask a question

Newbie

Views 532

Replies 3

My question relates to the payment of a lump sum death benefit to the estate of a deceased pension member.

I understand that the SMSF pension earnings remain tax exempt until the super death benefit is paid (in this case) to the deceased members estate.

If the super death benefit is paid in instalments (say 3 separate amounts) to the estate (due to differing timeframes for different Fund assets classes), does the tax exempt status of the Fund cease when the first lump sum death benefit is paid to the estate, or does exempt status remain until final lump sum death benefit is paid. 

All payments to the estate will be paid as soon as practicable (and no later than 6 months after date of death).         

1 ACCEPTED SOLUTION

Accepted Solutions

Best answer

Devotee

Replies 0

Hi @Connor2407,

 

We’d need more information from you to provide a detailed response to your question.

 

In this case, we’d suggest requesting SMSF specific advice – we can confirm key details with you and provide written advice on how we think the law applies to your situation. This is a free service, and we usually respond within 28 days of receiving your request.

 

Thanks.

 

3 REPLIES 3

Best answer

Devotee

Replies 0

Hi @Connor2407,

 

We’d need more information from you to provide a detailed response to your question.

 

In this case, we’d suggest requesting SMSF specific advice – we can confirm key details with you and provide written advice on how we think the law applies to your situation. This is a free service, and we usually respond within 28 days of receiving your request.

 

Thanks.

 

Devotee Registered Tax Practitioner

Replies 0

Lump sum death benefits can be paid in a maximum of two (2) payments  -  this is a SIS requirement.

Devotee

Replies 0

To answer this question accurately we need to know more about the SMSF. 

 

Is this a single or multi-member fund? how many members are in retirement phase/accumulation? what are their respective total super balances as it determines the segregation method that can be adopted by the fund? what segregation method is the fund currently using? what are the assets in the fund? who's died? was a nomination made for the pension? is it reversionary or binding? who are the beneficiaries? who are the surviving members/trustees if applicable? how will the beneficiary be paid ie pension or lump sum?

 

All these infomation are relevant and will be required to determine the exact impact they have on Exempt Current Pension Income of the fund (ECPI).

 

Goodluck!

Top Solution Authors