Private ruling: Superannuation benefit
Date of advice: 1 October 2020
Published: December 2020
Ruling period: Income year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Was the payment from the superannuation fund a superannuation member benefit under subsection 307-5(2) of the Income Tax Assessment Act 1997 ? | A1: Yes.

Relevant facts and circumstances: The taxpayer was a member of a superannuation fund (the Fund). The Fund is an APRA regulated fund. Several years ago, the taxpayer granted an Enduring Power of Attorney to his parents and brother. In the 20XX income year at the direction of the taxpayer, the Attorney applied to withdraw all of the taxpayer's superannuation entitlements in the Fund. The withdrawal claim was approved and processed several days later, and the account closed. The Fund statement to the taxpayer for the relevant period shows the withdrawal of the taxpayer's entire interest in the Fund and the closing balance of the taxpayer's interest in the Fund as at that date of processing was nil. The Fund made a payment to the taxpayer's bank account, as nominated by the member in the withdrawal form submitted. The payment comprised the taxpayer's entire superannuation benefits within the Fund.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subsection 307-5(1) | Income Tax Assessment Act 1997 Subsection 307-5(2) | Superannuation Industry (Supervision) Regulations 1994 Regulation 6.20 | Superannuation Industry (Supervision) Regulations 1994 Regulation 6.22

Reasons for decision: Summary: The payment from the Fund to the taxpayer was made because the taxpayer was a fund member. Accordingly, the payment is a superannuation member benefit. | Detailed Reasoning - Detailed reasoning: When a superannuation fund makes a payment of their member's entitlements in the fund it will be assessed depending on the characteristics of the payment. Subsection 307-5(1) of the ITAA 1997 defines the term superannuation benefit as being a payment described in the table appearing in the subsection. Item 1 of the table relevantly defines a 'superannuation fund payment' and states: | Detailed Reasoning - Superannuation death benefit: 1 | Detailed Reasoning - superannuation fund payment: A payment to you from a * superannuation fund because you are a fund member. A payment to you from a superannuation fund, after another person's death, because the other person was a fund member. Subsection 307-5(2) of the ITAA 1997 further clarifies that a payment described in column 2 of the table in subsection 307-5(1) is a superannuation member benefit. Based on the facts of this case, the Fund trustee of an APRA regulated fund, received a request from the Taxpayer (via his representative who had an enduring power of attorney) for the payment of the Taxpayer's entire superannuation interest as a lump sum. The Fund trustee processed the request in accordance with Superannuation Industry (Supervision) Regulations 1994 regulation 6.20 and regulation 6.22. The Fund trustee made the payment to the taxpayer in accordance with the application by the member. The payment was made by the superannuation fund to the taxpayer because he was a fund member. The payment is therefore a superannuation member benefit.