Private ruling: Assessability of superannuation lump sum payments to deceased estate
Published: June 2012
Ruling period: Year ending 30 June 2012.
Date scheme commenced: 1 July 2011.

Ruling: A2: Yes.

Relevant facts and circumstances: The deceased estate has been fully administered. The beneficiaries to the deceased estate are non-dependants of the deceased. The deceased estate received superannuation lump sum payments with taxed element taxable components only. The payments did not include any taxable component untaxed elements or tax-free components.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subdivision 82-B.

Reasons for decision: Summary: A death benefit termination payment paid to a trustee is taxed in the hands of the trustee in the same way that it would be taxed if paid directly to a beneficiary. That is, the portions of the payment are subject to tax to the extent that the beneficiary is a dependant or a non-dependant of the deceased. This means that a super death benefit paid to a trustee is taxed in the hands of the trustee in the same way that it would be taxed if paid directly to a beneficiary. For the first three tax returns, the deceased estate income to which no beneficiary is presently entitled is taxed at the general individual rates, with the benefit of the full tax-free threshold. No Medicare levy is payable. In the case of the deceased estate in question, the beneficiaries are non-dependant and the super death benefits paid only consisted of taxed elements. Therefore, the executor will be taxed on the super death benefits paid at the same rate as if the payment had been made directly to the beneficiary. The executor should show the taxed element at V item 13 in the trust tax return. Detailed information regarding the taxation implications of deceased estates is available from our website www.ato.gov.au.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | Questions and answers: Is the executor to the deceased estate required to include the superannuation lump sum payments in the trust's income tax return? | Will the executor to the deceased estate be taxed on the superannuation lump sum payments at the same rate as if the payments had been made directly to the beneficiaries?