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Edited version of your written advice
Authorisation Number: 1051187027075
Date of advice: 6 February 2017
Ruling
Subject: Superannuation lump sum
Question
Is any part of the superannuation lump sum payment included in your client's assessable income in their tax return for the 201X-1Y income year?
Answer
No.
This ruling applies for the following period
Year ended 30 June 201Y
The scheme commenced on
1 July 201X
Relevant facts
Your client is over 60 years of age.
In the 201X-1Y income year your client received a superannuation lump sum payment from their superannuation scheme (the Scheme).
A PAYG payment summary - superannuation lump sum from the Scheme shows that the payment comprises of a taxable component - taxed element and a tax free component. No tax was withheld from the payment.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 301-10.
Reasons for decision
Issue
Question
Summary of decision
As your client is aged over 60, they do not have to enter the tax-free component or the taxed element part of the taxable component of their superannuation payment on their tax return for the 201X-1Y income year.
Detailed reasoning
Lump sum payments made from a superannuation fund are called superannuation lump sum benefits, and these benefits will generally comprise:
● a tax free component; and
● a taxable component, which may include both or one of the following:
● an element taxed in the fund; and/or
● an element untaxed in the fund.
Section 301-10 of the Income Tax Assessment Act 1997 (ITAA 1997) applies to recipients of superannuation benefits who are aged 60 or above. Section 301-10 of the ITAA 1997 states that if the recipient is 60 years or over when they receive a superannuation benefit, the benefit is not assessable income and not exempt income.
A recipient who is 60 years or over must include the untaxed element of the taxable component of their superannuation payment as assessable income on their tax return. A recipient who is 60 years or over does not have to enter the tax-free component or the taxed element part of the taxable component of their superannuation payment on their tax return.