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Edited version of your written advice
Authorisation Number: 1051266687233
Date of advice: 14 September 2017
Ruling
Subject: Death Benefit - Interdependency
Question
Did (Beneficiary) have an interdependency relationship pursuant to section 302-200 of the Income Tax Assessment Act 1997 (ITAA 1997) with the Deceased at the time of the Deceased’s death?
Answer
Yes.
This ruling applies for the following period:
Income year ended 30 June 2017
The scheme commences on:
1 July 2016
Relevant facts and circumstances
1. The Deceased died late 2014.
2. The Taxpayer is a parent of the Deceased.
3. The Deceased never married; was not in a relationship and had no children.
4. In 2013, the Deceased was diagnosed with an illness.
5. The treatment for the Deceased’s illness was a multiple forms medication.
6. The Deceased was living with family (which included the beneficiary) at the time of death.
7. The Deceased attempted to live away from home but was unable to establish and maintain independence.
8. The Taxpayer was committed to providing care and support to the Deceased for as long as necessary to overcome and recover from their illness.
9. While the Deceased lived with the Taxpayer, the Taxpayer provided the Deceased with frequent and ongoing emotional, financial and domestic support and personal care including:
● undertaking household shopping, laundry and meal preparation
● the Deceased provided domestic supporting with garden and yard maintenance every fortnight
● the Deceased, would regularly takes trips to and from the airport as the deceased’s father (taxpayer’s husband) was a fly in-fly out worker
● The Deceased paid per fortnight for television and internet expenses.
● providing daily support to relieve their symptoms of pain and anxiety
● proving the Deceased with a car
● paying for the Deceased’s food, medication, clothing and other living expenses, and
● Contributing financially the Deceased’s education.
10. The trustee of the Deceased’s estate has received a superannuation death benefit from two complying funds.
11. The Taxpayer is a beneficiary of the Deceased’s estate.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 302-195
Income Tax Assessment Act 1997 section 302-200
All legislative references are to the ITAA 1997 unless otherwise stated.
Reasons for decision
Summary
The Taxpayer is considered to be a death benefits dependant for the purposes of section 302-195.
Detailed reasoning
In accordance with section 302-195, a death benefits dependant, of a person who has died, is:
(a) the deceased person's *spouse or former spouse; or
(b) the deceased person's *child, aged less than 18; or
(c) any other person with whom the deceased person had an interdependency relationship under section 302-200 just before he or she died; or
(d) any other person who was a dependant of the deceased person just before he or she died.
*To find definitions of asterisked terms, see the Dictionary, starting at section 995-1.
In this case, paragraphs 302-195(1)(a), (b) and (d) do not apply because the Taxpayer is a parent of the Deceased and the facts do not indicate that they were a dependant of the Deceased. Therefore, the Taxpayer will be a death benefits dependant of the Deceased only if the Taxpayer had an interdependency relationship with the Deceased just before they died.
Under subsection 302-200(1), two persons (whether or not related by family) have an ‘interdependency relationship’ if:
(a) they have a close personal relationship; and
(b) they live together; and
(c) one or each of them provides the other with financial support; and
(d) one or each of them provides the other with domestic support and personal care.
Based on the evidence provided, it is considered that the Taxpayer was in an interdependency relationship with the Deceased just before they died because:
● they had a close personal relationship;
● they lived together; and
● the Taxpayer provided the Deceased with financial and domestic support and personal care as required by subsection 302-200(1).
Consequently, the Taxpayer is a death benefits dependant for the purposes of section 302-195.
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