Private ruling: Superannuation benefits
Date of advice: 12 November 2021
Published: February 2022
Ruling period: 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are the payments made by the deceased taxpayer's (the Deceased) Fund a superannuation death benefit for the purposes of Subdivision 302 A of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: No | Q2: Are the payments made by the Deceased's Fund a superannuation benefit defined in Subsection 307-5(1) of the ITAA 1997? | A2: Yes

Relevant facts and circumstances: During the 20XX-XX income year, the Deceased completed and signed applications to close two superannuation accounts. These were lodged with the fund in 20XX. The Fund has provided confirmation they were received and processed. The taxpayer passed away in 20XX. The Fund issued Final Benefit Statements in XX 20XX and XX 20XX confirming benefits from the accounts and payments made to the Deceased's nominated bank accounts

Relevant legislative provisions: Income Tax Assessment Act 1997 Subdivision 302-A | Income Tax Assessment Act 1997 section 307-5 | Income Tax Assessment Act 1997 subsection 307-5(1) | Income Tax Assessment Act 1997 section 307-15

Reasons for decision: Summary: The payments from the Fund to the Deceased were made because they were a fund member. Accordingly, the payment is a superannuation member benefit. | Detailed Reasoning - Detailed reasoning: Subsection 995-1(1) of the ITAA 1997 states that a 'superannuation death benefit' has the meaning given by section 307-5 of the ITAA 1997. 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. In this case, the payments were made by the Fund to the Deceased's nominated bank account as requested by the Deceased immediately prior to her death. As such, the payments are superannuation member benefits paid by the Fund to the Deceased. Upon receipt by the Deceased, this payment loses its character of superannuation member benefit and simply becomes money which is part of the Deceased's estate to be distributed to the Deceased's beneficiaries in accordance with the deceased's wishes. Therefore, the payment made by the Fund to the Deceased's nominated bank account is not a superannuation death benefit for the purposes of Subdivision 302-A of the ITAA 1997.