LCG 2017/3 – SUPER DEATH BENEFITS AND THE TRANSFER BALANCE CAP

Editor: When a member of a superannuation fund dies, their death triggers a compulsory cashing event. If the deceased person had a ‘dependent’ (usually a spouse), it may be possible to cash out the deceased’s superannuation interest by way of a death benefit income stream (i.ie., pension), which could be reversionary or non-reversionary. From 1 July 2017, trustees of superannuation funds and their advisers need to understand the consequences that a superannuation death benefit may trigger in relation to the new transfer balance cap provisions.

The ATO’s new LCG provides numerous examples of credited and debits that arise in respect of the remaining dependent’s transfer balance cap as a result of being in receipt of either a reversionary or a non-reversionary death benefit superannuation income stream.

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