Tax on Superannuation Death Benefits: Can You Reduce It?

[@daniel_nel]

Very good explanation! Thank you.

[@SuperGuyAu]

You're welcome, Daniel!

[@jolo6539]

Great video Chris! At what age should the recontribution strategy start, so that all the super will be converted from taxable to tax free? Thanks

[@SuperGuyAu]

Excellent question, but one with no general answer. The time taken will depend on your account balance, tax components, age and contribution eligibility. Theoretically, someone with a balance of $330,000 or lower could achieve it in 1 year, whereas some with over $1M could take more than 10 years.

[@louisacarroll1062]

Hi Chris, really good video. If Super Dependant but not Tax dependant is non-resident, will they still have to pay the Medicare Levy? Thanks

[@SuperGuyAu]

My understanding is that Medicare Levy still applies, but this should be confirmed by a tax accountant. The beneficiary may also want to be aware of potential taxes in their resident jurisdiction on the benefits if no tax treaty applies.

[@bobkarakas4930]

Could you make a video about retiring overseas and how to reach your superannuation in overseas

[@SuperGuyAu]

Can do! I'll add it to the list. Generally, the rules with accessing super when living overseas are the same as when in Australia - the same preservation rules apply. However, you might want to consult a tax accountant in your new country about any tax (or other) implications.

[@OrnumCR]

I see Perth…especially Elizabeth Quay….

[@SuperGuyAu]

Yes, you do!

[@OrnumCR]

@@SuperGuyAu …Ex West Aussie here, now resident near Phillip Island. A small glimpse of ‘home’…very cool. Enjoy your vlogs…

[@andymacmac9151]

I take it withdrawing it all from super whilst on your death bed and paying it into your bank account would also negate the tax issue?

[@SuperGuyAu]

Yes, correct.

[@philliplivingstone5336]

Is an insurance policy on a superfund also taxed?

[@trace.l1977]

Hi Chris, if I have already paid 15% tax on personal concessional contribution, why would the beneficiary if he/she is a tax independent pay tax again on this portion? It seems double tax...this makes me feel not comfortable to claim tax reduction on extra personal concessional contribution. Hope you can clarify, thanks a lot.

[@brucegallen6387]

Hi Chris, I have a question. I have been learning about super re-contribution strategies in your videos and other readings. It seems to me that having a testimentary trust as part of your will enables the proceeds of super to go into the trust and apparently does not pay tax on all components of that super. So, I'm now thinking there is no benefit in me considering the re-contribution strategy. Have i missed something here?

[@johngoode8549]

Hi Bruce and Chris, Interesting observation. I'm creating a testamentary trust for several reasons, one is that the life insurance in my super and potential taxation. If the LPR / estate is the beneficiary of the super based life insurance, I'm under the impression that Bruce is correct, these super proceeds flow into the TT and are not taxed as the TT distributes income that used the life insurance proceeds as the source income, is this correct?

[@deancooper674]

I was trying to find out if it was correct , if we pulled our Pension phase $$ out recontributed it back thru our accumm fund and then put it back into Pension phase... Would it then be "cleaned" and Not liable to tax if willed to an Adult Child???

[@SuperGuyAu]

Theoretically, yes. You just need to be mindful of any taxes on withdrawals, contribution caps and age restrictions on contributions. You will also be using up contribution caps that won't be able to be used if you were considering making other contributions. Plus, consider that your funds will not be invested during the recontribution process and how market movements might impact you.

[@thebaconboss8231]

What about directing super death benefits to an adult child via LPR.

[@SuperGuyAu]

You can generally direct a super death benefit to an LPR. In such an instance, I believe 15% death tax is still payable on the portion paid to a non-tax dependant, but no Medicare Levy is payable, because an estate is not a person.

[@aussietaipan8700]

441 liked. This was most interesting and lots of things to think about.

[@SuperGuyAu]

Thanks for your continued viewing and comments!

[@russellh24680]

😊❤

[@SuperGuyAu]

Thanks for the support