Private ruling: Superannuation benefits
Published: January 2015
Ruling period: Year ending 30 June 20YY
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are the payments made by the deceased taxpayer's (the Deceased's) pension provider superannuation death benefits for the purposes of Subdivision 302-A of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: No.

Relevant facts and circumstances: The Deceased held two pension accounts in a superannuation fund (the Fund). At the end of the relevant income year, the Deceased completed and signed two Withdrawal forms requesting the Fund redeem their pension accounts in full and pay the resulting lump sums into a nominated savings account held in the Deceased's name. The withdrawal forms to redeem the two pension accounts were received by the Fund before the end of the relevant income year. The Deceased died at the beginning of the subsequent income year. Several days after the Deceased died, the Fund redeemed the two pension accounts in full and paid the resulting lump sums into the Deceased's nominated savings account as requested.

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 made by the Fund to the Deceased's nominated savings account are superannuation member benefits paid by the Fund to the Deceased. Upon receipt, these payments lose their character of superannuation member benefits and simply become money which is part of the Deceased's estate to be distributed to the Deceased's beneficiaries in accordance with their wishes. Therefore, the payments made by the Fund to the Deceased's nominated savings account are not superannuation death benefits for the purposes of Subdivision 302-A of the TAA 1997. | Detailed Reasoning - Detailed reasoning: Superannuation benefits are defined in section 307-5 of the ITAA 1997. In accordance with Item 1 of the table in subsection 307-5(1) of the ITAA 1997: • superannuation member benefit is a payment to you from a superannuation fund because you are a fund member; and • superannuation death benefit is a payment to you from a superannuation fund, after another person's death, because the other person was a fund member. Section 307-15 of the ITAA 1997 applies for the purposes of determining whether a payment is made to you, or received by you, and states: A payment is treated as being made to you, or received by you, if it is made: a) for your benefit; or b) to another person or to an entity at your direction or request. In this case, the payments were made by the Fund to the Deceased's nominated savings account as requested by the Deceased. As such, they are superannuation member benefits paid by the Fund to the Deceased. Upon receipt, these payments lose their character of superannuation member benefits and simply become money which is part of the Deceased's estate to be distributed to the Deceased's beneficiaries in accordance with their wishes. Therefore, the payments made by the Fund to the Deceased's nominated savings account are not superannuation death benefits for the purposes of subdivision 302-A of the TAA 1997.