SMSF Alert: June 2013
Key developments
- New rules allowing funds to continue claiming tax exemption after death of a member.
June was a busy time in parliament house but a quiet month on the super front, with only the one major development to highlight.
Continuing tax exemption for deceased estates
On 3 June the Income Tax Assessment Amendment (Superannuation Measures No. 1) Regulation 2013 was registered, giving effect to last year’s mid-year economic outlook announcement that the Government would remedy the Tax Office’s published views on the impact of a member’s death.
Previously the Tax Office (in draft tax ruling TR 2011/D3) had stated that a pension would cease on a member’s death (unless it was reversionary), meaning the loss of the pension tax exemption (and capital gains tax on assets sold).
Under the new rules, funds will be allowed to continue to claim the tax exemption after a member’s death until the benefit is paid out (which needs to be done as soon as practicable). The exemption will only be available on the balance at the time of death, adjusted for investment earnings.
Importantly, whilst the rules have only just come into force, they apply for the 2012/13 financial year onwards.
Other recent developments
Members may also have an interest in the following guide recently published on the ATO website:
- Super contributions – too much super can mean extra tax. A guide for individuals on concessional and non-concessional contributions, salary sacrifice, timing of contributions and how to avoid exceeding the caps.