The government has made amendments to "provide tax certainty for deceased estates in situations where a person has died while in receipt of a superannuation income stream".
Broadly, a superannuation fund is entitled to a tax exemption for income that supports the payment of superannuation income stream benefits (i.e., superannuation pensions).
Under the amendments, where a complying superannuation fund member was receiving a superannuation income stream immediately before their death, the superannuation fund will continue to be entitled to the earnings tax exemption in the period from the member's death until their benefits are cashed:
- by paying them out as a lump sum; and/or
- by commencing a new superannuation income stream;
subject to the benefits being cashed as soon as practicable.
The level of the exemption would be no greater than it was before the member's death (allowing for investment earnings after the member's death).
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