Income Tax Assessment (1997 Act) Regulations 2021
CHAPTER 3
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SPECIALIST LIABILITY RULES
PART 3-30
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SUPERANNUATION
Division 307
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Key concepts relating to superannuation benefits
Subdivision 307-C
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Components of a superannuation benefit
SECTION 307-125.02
COMPONENTS OF SUPERANNUATION BENEFITS AFTER DEATH OF RECIPIENT OF SUPERANNUATION INCOME STREAM
307-125.02(1)
For the purposes of paragraph 307-125(4)(a) of the Act, subsection (3) specifies an alternative method for determining the components of a superannuation benefit referred to in paragraph (3)(a) or (b) if: (a) immediately before the death of a person (the deceased ), a superannuation interest (the relevant superannuation interest ) was supporting a superannuation income stream (the original superannuation income stream ) payable to the deceased; and (b) the original superannuation income stream did not automatically revert to another person on the deceased ' s death; and (c) no amounts, other than investment earnings, have been added to the relevant superannuation interest on or after the deceased ' s death; and (d) one or both of the following occurs after the deceased ' s death:
307-125.02(2)
For the purposes of paragraph (1)(c), investment earnings includes: (a) an amount paid under a policy of insurance on the life of the deceased; and (b) an amount arising from self-insurance.
307-125.02(3)
The following method sets out how to work out the tax free component and taxable component of: (a) a superannuation death benefit mentioned in subparagraph (1)(d)(i); or (b) a superannuation benefit paid from a superannuation interest that supports the new superannuation income stream mentioned in subparagraph (1)(d)(ii). Method statement
Step 1.(a) an amount paid on or after the death of the deceased under a policy of insurance on the life of the deceased;
(b) an amount arising on or after the death of the deceased from self-insurance.
Step 2.
Step 3.
For the purposes of paragraph 307-125(4)(a) of the Act, subsection (3) specifies an alternative method for determining the components of a superannuation benefit referred to in paragraph (3)(a) or (b) if: (a) immediately before the death of a person (the deceased ), a superannuation interest (the relevant superannuation interest ) was supporting a superannuation income stream (the original superannuation income stream ) payable to the deceased; and (b) the original superannuation income stream did not automatically revert to another person on the deceased ' s death; and (c) no amounts, other than investment earnings, have been added to the relevant superannuation interest on or after the deceased ' s death; and (d) one or both of the following occurs after the deceased ' s death:
(i) a superannuation death benefit that is a superannuation lump sum is paid using only an amount from the relevant superannuation interest;
(ii) a superannuation income stream (the new superannuation income stream ) is commenced using only an amount applied from the relevant superannuation interest.
307-125.02(2)
For the purposes of paragraph (1)(c), investment earnings includes: (a) an amount paid under a policy of insurance on the life of the deceased; and (b) an amount arising from self-insurance.
307-125.02(3)
The following method sets out how to work out the tax free component and taxable component of: (a) a superannuation death benefit mentioned in subparagraph (1)(d)(i); or (b) a superannuation benefit paid from a superannuation interest that supports the new superannuation income stream mentioned in subparagraph (1)(d)(ii). Method statement
Step 1.
Reduce the amount of the benefit by the extent, if any, to which the benefit is attributable to any of the following:
Step 2.
The tax free component of the benefit is the amount that represents the same proportion of the amount resulting from step 1 as the tax free component of the relevant superannuation interest bore to the value of the relevant superannuation interest when the original superannuation income stream commenced.
Step 3.
The taxable component of the benefit is the amount of the benefit less the tax free component of the benefit worked out under step 2.
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