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Edited version of your written advice
Authorisation Number: 1051333739473
Date of advice: 19 February 2018
Ruling
Subject: Total and permanent disability benefits
In order to protect the privacy and commercial in-confidence components of this private binding ruling the following summary is provided:
The Commissioner has ruled on each of the specific questions.
Question 1
Will each of the interval payments for Total and Permanent Disability (TPD) benefits received by the Fund from Life Insurance Co and paid to the affected Member of the Fund be a ‘disability superannuation benefit’ as defined in subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997) for the purposes of section 295-460 of the ITAA 1997?
Answer
Yes
Question 2
Will the Fund be entitled to claim a deduction under section 295-465 of the ITAA 1997 for the total amount of the premiums paid to Life Insurance Co in respect of the TPD benefits for which interval payments will be made?
Answer
Yes
Question 3
Will any capital gain made by the Fund in respect of the interval payments for TPD benefits be disregarded by virtue of Item 7 in section 118-300 of the ITAA 1997?
Answer
Yes
Question 4
Will each of the interval payments for TPD benefits be a ‘superannuation lump sum’ as defined in section 307-65 of the ITAA 1997?
Answer
Yes
Question 5
Will the amounts paid by Life Insurance Co directly to service providers in relation to claimant Members be:
a) taken to be or deemed to be a disability superannuation benefit as defined in subsection 995-1(1) of the ITAA 1997, paid by or on behalf of the Fund
b) a contribution in the hands of the Fund or
c) assessable income as ordinary income of the Fund under section 6-5 of the ITAA 1997 or statutory income of the Fund under section 6-10 of the ITAA 1997 as part of a net capital gain under section 102-5 of the ITAA 1997?
Answer
No