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30 Oct, 2018

Death tax scrapping brings fairness back to superannuation system

SuperConcepts welcomes the announcement to scrap the tax liability on death benefits from life insurance proceeds when rolling over to a new superannuation fund.

Assistant treasurer Stuart Robert announced the new changes at the Alliance for a Fairer Retirement System inaugural summit today.

"We certainly welcome this issue being rectified because it wasn’t the original intention to penalise dependents, but people have been suffering unintended consequences of this tax liability," said Mark Ellem, SuperConcepts Executive Manager of SMSF Technical Services.

"Death benefits are meant to be tax free to dependents and not a situation where emotional stress is compounded with financial stress, so it is good to see the Minister addressing this in his first public foray discussing superannuation. 

"The effect of this new law ensures that death benefit lump sums stay tax-free for dependents even if they are rolled over within the superannuation system.

"This is the way the superannuation system was intended to work and brings it back into being a smooth, functional and fair system during the tough times of dealing with the death of a family member," said Mr Ellem.

 

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