Private ruling: Superannuation income stream
Date of advice: 31 July 2017
Published: November 2017

Ruling: Q1: Is any part of the superannuation income stream received from your superannuation fund assessable to you in the 2015-16 income year under subsection 301-20(1) of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes

Relevant facts and circumstances: The Taxpayer was over the age of 60 in the 2015-16 income year. The Taxpayer is a citizen of Australia. The Taxpayer left Australia for an overseas country in the 2006-07 income year and became a permanent resident another country. Prior to leaving Australia, the Taxpayer was a member of a complying Australian superannuation fund. The Taxpayer is in receipt of a superannuation income stream.

Relevant legislative provisions: Income Tax Assessment Act 1997 Division 301 | Income Tax Assessment Act 1997 Division 301-10 | Income Tax Assessment Act 1997 section 301-C | Income Tax Assessment Act 1997 section 301-100

Reasons for decision: Summary: The Taxpayer is over the age of 60 years of age and receives pension benefits from an Australian Superannuation fund. The element untaxed in the fund is included in the Taxpayer’s assessable income in the 2015-16 income year, however the Taxpayer is entitled to a tax offset equal to 10% of the taxable component of the benefit. | Detailed Reasoning - Detailed reasoning: Division 301 of the Income Tax Assessment Act 1997 (ITAA 1997) sets out the taxation treatment that applies to superannuation 'member benefits' paid from complying superannuation funds. Member benefits are broadly all superannuation benefits other than benefits paid after the death of a member. The tax arrangements differ in accordance with the age of the person that receives the superannuation benefit and whether the superannuation benefit is a superannuation lump sum or a superannuation income stream. In accordance with section 307-120 of the ITAA 1997, a superannuation lump sum benefit will generally comprise of : ● a tax free component; and ● a taxable component which may include: − an element taxed in the fund; and/ or − an element untaxed in the fund. | Detailed Reasoning - Member Benefits – Recipient aged 60 or over: Section 301-10 of the ITAA 1997 states: If you are 60 years or over when you receive a superannuation benefit, the benefit is not assessable income and is not exempt income. However, any element untaxed in the fund is taxed in accordance with Division 301-C of the ITAA 1997. Section 301-100 of the ITAA 1997 applies to those over 60 years and states: (1) If you are 60 years or over when you receive a superannuation income stream benefit, the element untaxed in the fund of the benefit is assessable income. (2) You are entitled to a tax offset equal to 10% of the element untaxed in the fund of the benefit. In this case, the Taxpayer is over 60 years of age and receive benefits from the their Australian super, an untaxed source. The element untaxed in the fund is included in your assessable income. However, you are entitled to a tax offset equal to 10% of the taxable component of the benefit.