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Edited version of private advice

Authorisation Number: 1051950892840

Date of advice: 15 March 2022

Ruling

Subject: Superannuation benefits

Question 1

Are the payments made by the deceased taxpayer's (the Deceased) superannuation fund superannuation death benefits for the purposes of Subdivision 302 A of the Income Tax Assessment Act 1997 (ITAA 1997)?

Answer

No.

Question 2

Are the payments made by the Deceased's superannuation fund superannuation benefits as 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:

1 July 20XX

Relevant facts and circumstances

The Deceased had granted an Enduring Power of Attorney to his Attorneys to manage his affairs.

In May 20XX the taxpayer's Attorney lodged several requests for lump sum withdrawals on the taxpayer's behalf. The Fund has provided confirmations that these were received and processed.

The taxpayer passed away in May 20XX.

The Fund has provided evidence confirming the nominated benefits were released in May 20XX and June 20XX.

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

Summary

The payments made by the Fund to the Deceased's nominated savings account are superannuation member benefits paid by the Fund to the Deceased. Upon receipt by the Deceased, these payments lose their character of superannuation member benefits and simply become money which is part of the Deceased's estate to be distributed to the Deceased's beneficiaries in accordance with their wishes.

The payments made by the Fund to the Deceased's nominated savings account are not superannuation death benefits for the purposes of Subdivision 302-A of the ITAA1997.

Detailed reasoning

Subsection 995-1(1) of the ITAA1997 states that a 'superannuation death benefit' has the meaning given by section307-5 of the ITAA1997.

Superannuation benefits are defined in section 307-5 of the ITAA1997. In accordance with Item1, Column 2 of the table in subsection 307-5(1) of the ITAA1997 a superannuation member benefit is a payment to you from a superannuation fund because you are a fund member.

Superannuation death benefit is defined in subsection307-5(4) of the ITAA1997 as being a payment described in Column3 of the table in subsection307-5(1). A superannuation death benefit is described in Column3 of Item1 of the table in subsection307-5(1) as:

... A payment to you from a superannuation fund, after another person's death, because the other person was a fund member.

Section 307-15 of the ITAA1997 applies for the purposes of determining whether a payment is made to you, or received by you, and states:

A payment is treated as being made to you, or received by you, if it is made:

a)        for your benefit; or

b)        to another person or to an entity at your direction or request.

In this case, the payments were made by the Fund to the nominated bank account as requested by the Deceased's Attorney immediately prior to his death. As such, the payments are superannuation member benefits paid by the Fund to the Deceased.

Upon receipt by the Deceased, these payments lose the character of superannuation member benefits and simply become money which is part of the Deceased's estate to be distributed to the Deceased's beneficiaries in accordance with the wishes of the Deceased.

Therefore, the payments made by the Fund to the nominated bank account of the Deceased are not superannuation death benefits for the purposes of Subdivision 302-A of the ITAA1997.