If you are under 60 years old or/and the benefit is from a reversionary capped (the income stream reverts to you automatically upon the member’s death) defined benefit income stream where the deceased was 60 years or over when they died; or if you are 60 years old or over and the benefit is from a capped benefit income stream, your self-managed super fund has to withhold tax from benefit payments.

When tax is not withheld:

If the member:

• has died and the benefit is paid to a dependent beneficiary as a lump sum
• has died and the benefit is paid to a dependent beneficiary as an income stream which is not a capped defined benefit income stream and either the dependant or member were 60 years or over
• is 60 years old or over and the benefit is from an income stream which is not a capped defined benefit income stream
• died in the line of duty as a member of the defence force, police or protective services and the benefit is paid as a lump sum.
• has a terminal medical condition

To know how to withhold tax, please contact Business Mantra team at 08 92423555 or visit our website www.businessmantra.com.au

Source: ATO