Is the payment of $xxx,xxx.xx, requested shortly before the Member's death, but paid after their death in a series of lump sum payments in the period xx/xx 2020 to xx/xx 2021, a superannuation member benefit under subsection 307-5(2) of the Income Tax Assessment Act 1997 (ITAA 1997)?? Summary No, the payment from the Member's account is a superannuation death benefit under subsection 307-5(4) of the ITAA 1997.
The Member's date of birth is xx/xx 1933. The Member passed away on xx/xx 2020. The Member was a member of a self managed superannuation fund (the Fund). The Trustee of the Fund is a corporate trustee. In an email dated xx/xx 2020, the Fund's financial planner emailed the Power of Attorney for the Member, recommending that the existing assets of the Fund be converted to cash and the Fund be wound up. In an email dated xx/xx 2020, the Power of Attorney responded in agreement. On xx/xx 2020 and xx/xx 2020, the Fund's financial planner applied for redemption of the bulk of the Fund's managed investments. The Member was XX years old at the time of this request. On xx/xx 2020, the redemption proceeds began to be received into the Fund's cash account. The lump-sum payments, totalling $xxx,xxx.xx, were withdrawn from the Fund's cash account as follows: • xx/xx 2020: $xxx,xxx • xx/xx 2020: $xxx,xxx • xx/xx 2020: $xxx,xxx • xx/xx 2020: $xxx,xxx • xx/xx 2020: $xxx,xxx • xx/xx 2021: $xx,xxx.xx The payments were received into the Member's personal bank account.
In an email dated xx/xx 2023, the executor of the Member's deceased estate, stated that the distributions had been paid in increments because there was a daily banking limit. On xx/xx 2016, the Member had signed a Binding Death Benefit Nomination form, requesting that their benefits in the Fund be distributed equally between their five children. Minutes of a Fund meeting held by the Directors of the Trustee for the 2021 income year show that the Member's benefits were paid out as follows: • Beneficiary 1: $xxx,xxx.xx • Beneficiary 2: $xxx,xxx.xx • Beneficiary 3: $xxx,xxx.xx • Beneficiary 4: $xxx,xxx.xx • Beneficiary 5: $xxx,xxx.xx The Statement of Financial Position for the Fund, as at xx/xx 2021, shows a lump sum payment to the Member in the amount of $xxx,xxx. Minutes of a Fund meeting held by the Directors of the Trustee for the 2021 income year state that the Fund was wound up on xx/xx 2021. In an email dated xx/xx 2023, the Fund's tax agent stated that the Fund's financial planner had retired and so would not be able to provide information regarding whether they had knowledge of the Member's passing prior to the payments being made.
Income Tax Assessment Act 1997 Division 301 Income Tax Assessment Act 1997 Division 302 Income Tax Assessment Act 1997 Section 307-5 Income Tax Assessment Act 1997 Section 307-65 Income Tax Assessment Act 1997 Section 307-70 Income Tax Assessment Act 1997 Subsection 995-1(1) Income Tax Assessment (1997 Act) Regulations 2021 Regulation 307-70.01 Income Tax Assessment (1997 Act) Regulations 2021 Regulation 307-70.02 Superannuation Industry (Supervision) Regulations 1994 Regulation 1.06 Superannuation Industry (Supervision) Regulations 1994 Regulation 6.12 Superannuation Industry (Supervision) Regulations 1994 Regulation 6.20 Superannuation Industry (Supervision) Regulations 1994 Regulation 6.21 Superannuation Industry (Supervision) Regulations 1994 Schedule 1 to the Table in Part 1 Detailed