The Australian Taxation Office (ATO) Interpretative Decision (ID) 2015 / 23 states that member’s benefits in a regulated superannuation fund must be ‘cashed’ upon death by being paid – mere journal entries are insufficient.

ID 2015 / 23

The issue addressed in this ID is whether or not there is a breach of the Superannuation Industry Supervision Regulations 1994 (SISR) if a death benefit is simply debited from the decreased member’s account and credited to the surviving spouse’s account, i.e., posting a journal entry.

The ATO have taken the view that requirements of SISR will not be met.

Part 6 of SISR contains ‘payment standards’ that apply to SMSF when paying a member’s death benefit.

Division 6.2 of SISR, sets out the general rules of for paying benefits, including – paid as cash; rolled over; transferred; or allotted as required by regulation.

Furthermore 6.21 of SISR states that the benefits need to be paid out of the superannuation system, not just moved around.

If you would like to discuss further please contact us:
McNamara and Co - Chartered Accountants, located minutes from the Melbourne CBD
www.mcnamaraandcompany.com.au/contact-us
Phone +61 3 9428 1062
Email admin@mcnamaraandco.com

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