ATO releases rulings on payment of superannuation death benefits

Friday 30 January 2015

The Australian Taxation Office (ATO) has released two Interpretative Decisions, which deal with whether a self managed superannuation fund (SMSF) can pay a superannuation death benefit by making an accounting journal entry in the fund's books.

Both cases involve an SMSF with two married members, where one member has passed away and the remaining member is to receive a death benefit. Once received, the surviving spouse wishes to re-contribute the death benefit to the SMSF. To avoid transaction fees the surviving spouse wishes to transfer the death benefit from the deceased’s account to their own account via an accounting journal entry.

The ATO’s view is that a journal entry is insufficient to establish that a death benefit payment has been made from the SMSF under both tax and superannuation law.

Further information

ATO Interpretative Decision ATO ID 2015/2 Superannuation benefits: Journal entry insufficient to constitute payment of a death benefit

ATO Interpretative Decision ATO ID 2015/3 Superannuation benefits: a member's benefits must be 'cashed' upon death

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