The ATO has released the final version of LCG 2017/D3, which contains further details on the treatment of reversionary and non-reversionary death benefit income streams.
The tax office yesterday released the finalised version of LCG 2017/D3, titled LCG 2017/3 Superannuation reform: Superannuation death benefits and the transfer balance cap, which provides guidance on the tax and regulatory treatment of superannuation death benefits and the treatment of death benefit income streams.
SuperConcepts executive manager of SMSF technical and private wealth Graeme Colley said the ATO has provided further details about how death benefit pensions work in the finalised version of the guidance.
“In paragraph 14, for example, it indicates that setting up a bank account for a reversionary pensioner won’t stop it from being a reversion, because of the automatic reversion provisions there,” Mr Colley told SMSF Adviser.
“I think that’s a good thing because in some cases while the payment is automatically going through after the death of the individual, due to the automatic crediting of the pension, it would still go through to the account of the deceased for maybe one or two payments. The bank would then accredit it to the reversionary bank account.”
Mr Colley said it was a practical approach by the ATO to the problem as it won’t stop the pension from being reversionary, even though there might be a small break between the time it was paid to the individual who died and when it goes through to the reversionary after that.
See the full story here: https://www.smsfadviser.com/news/15457-ato-finalises-guidance-on-death-benefits