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  • Example 4 – Dependent child death benefit rollover

    Example 4 assumes there are no losses or administration fees. In some cases, rounding has been applied to eliminate cents and simplify the calculations.

    Holly is a member and trustee of the Holly SMSF. On 1 August 2019, Holly dies while in receipt of a non-reversionary retirement phase superannuation income stream valued at $1,180,000.

    Holly's super interest will be divided 50-50 to Holly's two children, Ruby and Bertha.

    On 1 October 2019, the fund receives an insurance policy payment of $800,000. At this date, the retirement phase interest was valued at $1,200,000 due to investment growth.

    On 1 February 2020, the entire amount is rolled over to another fund to be paid to the children. At this date, the interest in total is valued at $2,200,000, due to further investment growth.

    When calculating the retirement phase value to be included on the death benefit rollover statement, the fund needs to identify the ‘at-death’ value of the retirement phase interest, plus all investment earnings attributable to it.

    The ‘at-death value’ was $1,180,000.The $20,000 earnings between 1 August and 1 October are included. When the insurance policy is included into the account, the retirement phase interest (and earnings) represents 60% of the total of the account ($1,200,000 ÷ $2,000,000 × 100).

    Therefore, 60% of the earnings between 1 October and 1 February are included in the retirement phase value: 60% of $200,000 = $120,000.

    The retirement phase value to be reported on the death benefit rollover statement is: $1,180,000 + $20,000 + $120,000 = $1,320,000.

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      Last modified: 31 Jan 2019QC 25212