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SMSF PAYG REGISTRATION

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Newbie

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Hi,

Can someone please give me a precise, easily understood, definition of:

"a capped defined benefit income stream"

 

The ATO literature states that: "Capped defined benefit income streams include life expectancy and market linked pensions."

I am not sure if this is designed to be an all embracing definition of a Capped Defined Benefit Income Stream ?

 

I have an SMSF in pension phase and I am the sole member, I am 74 yrs old and I pay myself an "Account Based Pension" - it is NOT Market Linked, and the amount is about 30% of the F/Y 17/18 Defined Benefit income cap of $100,000.oo.  My pension is NOT a lifetime pension, there is no death benefit, it is not related to any prior salary. In short, my pension is not, in my opinion, a "Defined Benefit".

 

I am trying to determine if I need to register my fund for zero PAYG witholding tax ? 

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Devotee Registered Tax Practitioner

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I am 74 yrs old and I pay myself an "Account Based Pension" 

 

This means your fund has no requirement to register for PAYGW.

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Devotee Registered Tax Practitioner

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I am 74 yrs old and I pay myself an "Account Based Pension" 

 

This means your fund has no requirement to register for PAYGW.

Anonymous

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Hi @tramoyon 

 

further to Bruce4tax information ...

 

A capped defined benifit is an older type scheme that was generally for public servants and by the sounds of it you may have an account based pension that you set up in your own SMSF?

All of this means that given your age and situation you do not have to register for PAYGW as all of your drawings (pension and lump sums) from your fund will be tax free.

 

Just in case I have it wrong here is an interesting line on capped defined benefits and PAYGW.. 

https://www.dbalawyers.com.au/ato/payg-withholding-on-legacy-pensions/

 

 

Newbie

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Thank you MVT (Devotee) for taking the time to answer me and for the Link you provided. I am now happy that my SMSF does not pay me my pension from a "capped defined benefit income stream", and therefore I do not have to satisfy any PAYG obligations. I can now ignore the Lodgment Reminders put out by the ATO.

Regards

TRAMOYON

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