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Edited version of private advice
Authorisation Number: 1051914995135
Date of advice: 2 November 2021
Subject: Superannuation benefits
Is the payment made by the deceased taxpayer's (the Deceased) Fund a superannuation death benefit for the purposes of subdivision 302 A of the Income Tax Assessment Act 1997 (ITAA 1997)?
Is the payment made by the Deceased's Fund a superannuation benefit defined in subsection 307-5(1) of the ITAA 1997?
This ruling applies for the following period:
30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances:
The Deceased was born during the 19XX-XX income year.
The deceased was in receipt of an XXXX pension.
During the 20XX-XX income year, the deceased completed and signed an application to close two superannuation accounts. These were lodged with the fund on that day, the fund has provided confirmation they were received and processed on the XX Month 20XX.
The taxpayer passed away on XX Month 20XX.
The fund issued Final Benefit Statements on XX Month 20XX. showing withdrawal benefits from the pension accounts and payments made to the deceased's personal bank accounts.
Relevant legislative provisions
Income Tax Assessment Act 1997 Subdivision 302-A
Income Tax Assessment Act 1997 section 307-5.
Income Tax Assessment Act 1997 subsection 307-5(1)
Income Tax Assessment Act 1997 Section 307-15.
Reasons for decision
The payment from the Fund to the taxpayer was made because he was a fund member. Accordingly, the payment is a superannuation member benefit.
Superannuation death benefit
Subsection995-1(1) of the ITAA1997 states that a 'superannuation death benefit' has the meaning given by section 307-5 of the ITAA1997.
Subsection 307-5(1) of the ITAA 1997 defines the term superannuation benefit as being a payment described in the table appearing in the subsection. Item 1 of the table relevantly defines a 'superannuation fund payment' and states:
Types of superannuation benefits
Superannuation benefit type
Superannuation member benefit
Superannuation death benefit
superannuation fund payment
A payment to you from a * superannuation fund because you are a fund member.
A payment to you from a superannuation fund, after another person's death, because the other person was a fund member.
Subsection 307-5(2) of the ITAA1997 further clarifies that a payment described in column 2 of the table in subsection 307-5(1) is a superannuation member benefit. In this case, the payment was made by the Fund to the Deceased's nominated savings account as requested by the Deceased immediately prior to her death. As such, the payment is a superannuation member benefit paid by the Fund to the Deceased.
Upon receipt by the Deceased, this payment loses its character of superannuation member benefit and simply becomes money which is part of the Deceased's estate to be distributed to the Deceased's beneficiaries in accordance with the deceased's wishes.
Therefore, the payment made by the Fund to the Deceased's personal bank account is not a superannuation death benefit for the purposes of subdivision 302-A of the ITAA1997.