Can beneficiaries be taxed on inheriting superannuation savings?
That was one of the questions recently posed by a member.
Well, the simple answer is, it’s complicated.
The following information is not intended to be advice. You should seek professional taxation advice. There is information at the Australian Taxation Office website and at the Australian Securities & Investments Commission’s MoneySmart website .
Tax treatment of superannuation paid to a beneficiary after death depends on
a) whether super is paid as a lump sum or income stream
b) if a beneficiary is classified as a dependant, and
c) the age of the beneficiary.
Death benefits from super, paid to a person who is dependent on the person who died (e.g. spouse, dependent child (disability or under 18) or in an “interdependent relationship”) are not taxed.
Benefits to those who are not dependent (this includes adult children) could be taxed at either 15% or 30% depending on whether the super is classed as ‘taxed’ or ‘untaxed’.
For more information, visit the Money Smart website.
You can learn more about superannuation and other financial concepts via our Financial Literacy Service.