| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of private advice
Authorisation Number: 1051525346142
Although the outcome of this edited version remains unchanged, the reasoning in this record is no longer up to date.
Our current view and the factors we consider are published on our website at QC 42473 or QC 45254.
Date of advice: 03 June 2019
Ruling
Subject: Superannuation death benefits
Question
Was the payment made by the deceased taxpayer's pension provider a superannuation a superannuation benefit defined in subsection 307-5(1) Income Tax Assessment Act 1997 (ITAA 1997)?
Answer
Yes
This ruling applies for the following period:
Income year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
The Deceased was a member of a complying superannuation fund (the Fund).
The trustee of the Fund was an entity (the Trustee).
The Deceased has been in receipt of an account-based pension from the Fund (i.e. a pension complying with regulation 1.06(9A)(a) of the Superannuation Industry (Supervision) Regulations 1994 (SISR).
The Deceased granted an Enduring Power of Attorney to an individual (the Attorney).
In 20XX-XX income year, the Attorney requested an amount be withdrawn from the Deceased's account-based pension account.
The Trustee resolved agreed to make the payment as requested by the Deceased
In the 20XX-XX income year, the Trustee commenced liquidating listed securities with the intention of depositing the requested amount into the Deceased's bank account.
The Trustee notified the Deceased that they would deposit the nominated amount into the Deceased's bank account.
The Deceased passed away a few days before the payments from the Fund appeared their bank account.
>
Relevant legislative provisions
Income Tax Assessment Act 1997 Subdivision 302-A
Income Tax Assessment Act 1997 Section 307-5.
Income Tax Assessment Act 1997 Subsection 307-5(1)
Income Tax Assessment Act 1997 Section 307-15.
Reasons for decision
Subsection 995-1(1) of the ITAA 1997 states that a 'superannuation death benefit' has the meaning given by section 307-5 of the ITAA 1997.
Superannuation benefits are defined in section 307-5 of the ITAA 1997. In accordance with Item 1 of the table in subsection 307-5(1) of the ITAA 1997 a superannuation member benefit is a payment to you from a superannuation fund because you are a fund member;
Superannuation death benefit is defined in subsection 307-5(4) of the ITAA 1997 as being a payment described in Column 3 of the table in subsection 307-5(1). A superannuation death benefit is described in Column 3 of Item 1 of the table in subsection 307-5(1) as:
... A payment to you from a superannuation fund, after another person's death, because the other person was a fund member.
Section 307-15 of the ITAA 1997 applies for the purposes of determining whether a payment is made to you, or received by you, and states:
A payment is treated as being made to you, or received by you, if it is made:
a) for your benefit; or
b) to another person or to an entity at your direction or request.
In this case, the payments were made by the Fund to the Deceased's nominated savings account as requested by the Attorney. As such, they are superannuation member benefits paid by the Fund to the Deceased.
Upon receipt by the Deceased, these payments lose their character of superannuation member benefits and simply become money which is part of the Deceased's estate to be distributed to the Deceased's beneficiaries in accordance with their wishes.
Therefore, the payments made by the Fund to the Deceased's nominated savings account are not superannuation death benefits for the purposes of subdivision 302-A of the ITAA 1997.