Disclaimer
You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4.

Edited version of private advice

Authorisation Number: 1051988780639

Date of advice: 30 May 2022

Ruling

Subject: Superannuation member benefits

Question 1

Was the payment made by the Fund a superannuation death benefit for the purposes of section 307-5 of the Income Tax Assessment Act 1997 (ITAA 1997)?

Answer

No.

Question 2

Was the payment made by the Fund a superannuation member benefit defined in subsection 307-5(1) of the ITAA 1997?

Answer

Yes.

This ruling applies for the following period:

30 June 20XX

The scheme commences on:

17 June 20XX

Relevant facts and circumstances

During the 20XX-XX year, the Deceased applied to close her superannuation account with her Fund on the basis that the Deceased was 65 years or older.

A few days later, the Deceased passed away.

Shortly after, the superannuation benefit was paid into the Deceased's bank account.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 307-5

Income Tax Assessment Act 1997 Subsection 307-5(1)

Income Tax Assessment Act 1997 Subsection 995-1(1)

Summary

The lump sum payment made by the Fund to the Deceased's bank account is not a superannuation death benefit. The payment is instead a superannuation member benefit.

Detailed reasoning

Subsection 995-1(1) of the ITAA 1997 states that a 'superannuation death benefit' has the meaning given to it by section 307-5 of the ITAA 1997.

Column 3 of Item 1 of subsection 307-5(1) of the ITAA 1997 defines a superannuation death benefit as 'a payment to you from a superannuation fund, after another person's death, because the other person was a fund member'.

In the above definition, the payment is made to a secondary individual after the passing of the deceased member.

A 'superannuation member benefit' payment is defined in column 2 of item 1 of subsection 307-5(1) of the ITAA 1997 as 'a payment to you from a superannuation fund because you are a fund member'. In this case, the deceased made an application to the Fund for the release of benefits prior to her death. The application was accepted and the process commenced prior to her death, with the actual payment paid to the deceased's account after death. The Fund made a payment to the member for meeting the condition of release for attaining the age of 65[1].

Based on the relevant facts, the payment made by the Fund to the Deceased's bank account is not a superannuation death benefit for the purposes of section 307-5 of the ITAA 1997 and is instead a superannuation member benefit.


>

[1] Schedule 1 of the Superannuation Industry (Supervision) Regulations 1994