What to include at item 13
Death benefit employment termination payments (ETPs) and superannuation lump sums paid to trustees of deceased estates are reported at this item.
To complete this question, use the following that your payer would have provided:
- PAYG payment summary – superannuation lump sum
- PAYG payment summary – employment termination payment.
Superannuation death benefits paid to a trustee of a deceased estate
Print at label V Death benefit superannuation lump sum where the beneficiary is a non-dependant the taxed element and at label W Death benefit superannuation lump sum where the beneficiary is a non-dependant the untaxed element.
If you have more than one payment summary, unless one or more is an amendment of an earlier payment summary, add the taxed elements together and print the total at label V and add the untaxed elements together and print the total at label W.
A superannuation death benefit paid to a trustee is taxed in the hands of the trustee in the same way that it would be taxed if paid directly to a beneficiary, that is, portions of the payment are subject to tax to the extent that the beneficiary is a dependant or a non-dependant of the deceased. There is no tax payable to the extent that the payment is made to a dependant or eligible non-dependant (see Definition of terms) of the deceased.
Eligible non-dependants of deceased members of the Australian Defence Force and Australian police forces (including Australian Protective Services) who have died in the line of duty are to be treated as dependants for tax purposes.
The superannuation fund should have provided you with a PAYG payment summary – superannuation lump sum which shows the components of the payment.
The tax-free component of a superannuation death benefit received by a trustee is not subject to tax, regardless of whether the beneficiary is a dependant or non-dependant.
To the extent that a non-dependant is the beneficiary of the estate, the taxable component of the payment is assessable income.
Death benefit employment termination payments
To the extent that the beneficiary of the estate is a dependant, taxable component amounts up to the ETP cap ($230,000 for 2022–23) are not subject to tax and are not shown in the return. Print at label X Death benefit employment termination payment where the beneficiary is a dependant amounts above the ETP cap as they are assessable income.
To the extent that a non-dependant is the beneficiary of the estate, the taxable component of the payment is assessable income and should be shown at Y Death benefit employment termination payment where the beneficiary is a non-dependant.
If you have more than one payment summary, unless one or more is an amendment of an earlier payment summary, add the components that are assessable income together and show them at the appropriate labels.
An ETP paid to a trustee is taxed in the hands of the trustee in the same way that it would be taxed if paid directly to a beneficiary, that is, the portions of the payment are subject to tax to the extent that the beneficiary is a dependant or a non-dependant of the deceased.
The employer should have provided you with a PAYG payment summary – employment termination payment which shows the components of the payment.
The tax-free component of an employment termination payment received by a trustee is not subject to tax, regardless of whether the beneficiary is a dependant or a non-dependant.
For more information, see Death benefit employment termination payments.
Definition of terms
A person is a dependant of the deceased if, at the time of death or the time the payment was made, the person was:
- the surviving spouse, including a de facto spouse
- a former spouse, including a former de facto spouse
- a child of the deceased who was under 18 years old
- a financial dependant of the deceased person just before he or she died, or
- in an interdependency relationship with the deceased.
A person who is not a dependant of the deceased may be referred to as a non-dependant.
A person is an eligible non-dependant if they are a non-dependant of a deceased member of the Australian Defence Force or of an Australian police force (including Australian Protective Services) who has died in the line of duty.
An interdependency relationship exists where there is a close personal relationship between 2 people who live together, and one or both provide for the financial, domestic and personal support of the other. An interdependency relationship can also exist where there is a close personal relationship, but the other conditions are not satisfied, because of the physical, intellectual or psychiatric disability of one of the people.
Your spouse includes another person (of any sex) who:
- you were in a relationship with that was registered under a prescribed state or territory law
- although not legally married to you, lived with you on a genuine domestic basis in a relationship as a couple.
Child, in relation to a person, includes:
- an adopted child, stepchild or an ex-nuptial child of the person
- a child of the person’s spouse (as defined above)
someone who is a child of the person within the meaning of the Family Law Act 1975, for example, a child who is considered to be a child of a person under a state or territory court order giving effect to a surrogacy agreement.
Continue to: 14 Other Australian income and 15 Total of items 5 to 14
Return to: Instructions to complete the Trust tax return 2023