Self-managed superannuation fund (SMSF) specialist Cavendish Superannuation has pointed out the Australian Taxation Office’s (ATO’s) continuing interpretation regarding the handling of superannuation pension accounts upon the death of a member.
According to Cavendish, the ATO has confirmed that in the absence of a continuing pension beneficiary, a superannuation pension account becomes an accumulation account on the death of a member.
It said this then caused the account to pay tax on both income and capital gains from the date of death – something that “may create significant tax liabilities in the fund in addition to any that many be incurred when payments are made from the fund”.
Cavendish said the ATO had first stated such an interpretation in 2004, but submissions relating to possible changes to the interpretation could be made until 26 August.
