Among the various tax and superannuation changes contained in the 2012-13 Mid-Year Economic and Fiscal Outlook (MYEFO), released on 22 October 2012, the Government has indicated that it will move to provide tax certainty for superannuation funds upon the death of a member in receipt of a superannuation income stream.Stuart Jones, Thomson Reuters
Specifically, the Government said that it will amend the tax law to allow the tax exemption for earnings on assets supporting superannuation income streams to continue following the death of a fund member in the pension phase until the deceased member's benefits have been paid out of the fund. The proposed changes are intended to provide tax certainty for deceased estates by allowing superannuation fund trustees to dispose of pension assets on a tax-free basis to fund the payment of death benefits.
Details on superannuation income streams and the tax exemption for fund assets set aside to pay current pensions are outlined in Thomson Reuters Australian Superannuation Handbook 2012-13 and the Australian Financial Planning Handbook 2012-13.
Source: This article was first published in Thomson Reuters' Tax & Accounting Insight. To subscribe to Tax & Accounting Insight, or for more information, please:
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Prior to joining Maddocks, Andrew was a tax consultant at a Big 4 Chartered Accounting Firm.
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