top of page

WHAT HAPPENS TO MY SUPER WHEN I DIE?

  • Writer: Peer Wealth
    Peer Wealth
  • Jun 5, 2017
  • 2 min read


1. SMSF Trustee Responsibility

Following the passing of a member decisions need to be made regarding the SMSF.

  • Will the SMSF be retained

  • If it is retained who will be the Trustee

  • Will a corporate trustee be a consideration?

  • How will the death benefit be paid, In cash or in specie

  • Will there be CGT implications for the fund

2. Payment of the Death Benefit

Superannuation Industry Supervision (Sis) Regulations require that the members benefit be cashed as soon as practicable after the member’s death. For a lump sum payment the payment can be paid in specie i.e. by transferring physical assets out of the fund into a beneficiary’s possession however in Executor’s position it cannot be simply be an internal transfer by a journal within the fund.

The payment of the death benefit as a lump sum is 100% tax free to a dependant/spouse such as Executor and part taxable to Non Dependant Beneficiary 1.

For Non Dependant Beneficiary 1 the tax free portion paid is non-taxable and the balance is included in Non-Dependant Beneficiary 1s income tax return with a maximum tax rate of 15% for any funds that are paid from a taxed element and 30% for payments from an untaxed element.

The SMSF must register for PAYG Withholding and issue a PAYG payment summary within 14 days of making the lump sum payment.

The process is as follows:

  1. Review the trust deed for Death Benefit guidelines

  2. Calculate Members balance

  3. Identify the funds that will be used to pay the benefit.

  4. Calculate any Capital Gains Tax that may be payable on selling down the assets or transferring in specie.

  5. Make the Death benefit payment

  6. Issue the PAYG summary as required

  7. Notify the ATO of the changes to the SMSF

3. Who is a tax-free dependant?

Under taxation law, a death benefit dependant includes:

  • the deceased's spouse or de facto spouse

  • the deceased's former spouse or de facto spouse

  • a child of the deceased under 18 years old

  • a person financially dependent on the deceased

  • a person in an interdependency relationship with the deceased.

Comments


Get in touch with us today by filling out our enquiry form.

Let's explore how Peer Wealth can support you
xero-platinum-partner-badge-RGB.png
Champions_2019_Blue_Finalist_Logo.jpg
Sydney Northern Beaches Business of the year award

2017 SNB Business of The Year

Sydney Northern Beaches Business of the year award

2017 & 2022
Professional Services Award

SMSF and acounting awards 2018
SMSF and acounting awards 2018
Champions_2020_Blue_Finalist_Logo.jpg
2019.png

Contact Information:

(02) 8014 7608
info@peerwealth.com.au
PO Box 444 Manly NSW 2095

Office Location:
 
Suite 202b, 39 East Esplanade
Manly NSW 2095

  • Facebook
  • Instagram
  • YouTube
  • LinkedIn

Liability limited by a scheme approved under Professional Standards Legislation.

 

Peer Wealth Pty Ltd is a member of Chartered Accountants Australia and New Zealand.

 

Peer Wealth Pty Ltd operates under Australian Credit License: 390255.

Peer Wealth FP Pty Ltd ABN 24 115 294 463 is a Corporate Authorised Representative (Representative No, 001281977) of Futuro Financial Services Pty Ltd ABN 30 085 870, Australian Financial Services Licensee (AFSL 238478).

Financial Services Guide v19.0 and Daniel Brown Adviser Profile v3.0
Financial Services Guide v19.0 and Greg Nunan Adviser Profile v3.0

Privacy Policy

All information contained in this website is of a general nature and is not intended to be exhaustive. It is made available in good faith and believed to be correct at the time of preparation. The information does not provide specific advice as the objectives, financial situation, and specific needs of any particular person, including yours, were not taken into account when preparing the information. Prior to making any financial decisions, always seek independent legal and financial advice. Futuro Financial Services Pty Ltd and its authorised representatives (or credit representatives) do not accept liability for any errors or omissions of information supplied on this website.

© 2025 Copyright Peer Wealth

bottom of page