Tax Laws Amendment (Simplified Superannuation) Act 2007 (9 of 2007)

Schedule 1   Main superannuation amendments

Part 2   Main consequential amendments

Income Tax Assessment Act 1997

15   After section 320-105


320-107 Deductions for increased amount of lump sum death benefit

(1) A *life insurance company can deduct an amount under this section if:

(a) it pays a lump sum because of the death of a person to the trustee of the deceased’s estate or an individual who was a *spouse, former spouse or child of the deceased at the time of death or payment; and

(b) the payment is in relation to the commutation of, or is of the capital amount payable on the termination of, an *exempt life insurance policy or a life insurance policy covered by subparagraph (b)(i) of the definition of virtual PST life insurance policy in subsection 995-1(1) while the policy was held by the deceased by reason that the deceased would have been entitled to receive the *annuity concerned; and

(c) it increases the lump sum by an amount (the tax saving amount ) so that the amount of the lump sum is the amount that the company could have paid if no tax were payable on amounts included in its assessable income under Subdivision 320-B.

(2) The company can deduct the amount for the income year in which the lump sum is paid.

(3) The amount the company can deduct is:

Tax saving amount / Complying superannuation class rate


complying superannuation class rate is the rate of tax imposed on the *complying superannuation class of the company’s taxable income for the income year.

(4) The amount the company can deduct for a sum paid because of the death of a person to the trustee of the deceased’s estate is so much of the subsection (3) amount as is appropriate having regard to the extent to which individuals referred to in paragraph (1)(a) can reasonably be expected to benefit from the estate.