subscribe to our newsletter
New ATO ID highlights tax benefit for SMSFs

New ATO ID highlights tax benefit for SMSFs

Reporter
11 June 2015

A recent decision from the ATO is important for all SMSFs paying insured death benefits, according to one industry lawyer.

ATO ID 2015/17, released late last week, sets out the ATO view that a super trustee can choose to claim a deduction for the “future service portion” of the death benefit and this choice can be made after the member has died, according to Michael Hallinan, special counsel at Townsends Business & Corporate Lawyers.

The choice must be made in the tax return for the financial year in which the death benefit is paid, Mr Hallinan explained.

Choosing to claim a deduction for the future service portion can provide the fund with a significant tax loss, which can be offset against current or future assessable income, he added.

“This choice is instead of claiming a tax deduction for the premium. Further it seems that the choice can be made even if a deduction for the premiums was made in the preceding year. However, once the choice is made, it applies to all members and applies to future financial years (unless the ATO consents),” Mr Hallinan said.

New ATO ID highlights tax benefit for SMSFs
smsfadviser logo
join the discussion

Do your clients plan to add additional members to their SMSF if the new six member limit is passed as law?

SUBSCRIBE TO THE
SMSF ADVISER BULLETIN

Get the latest news and opinions delivered to your inbox each morning

In this month's issue:

  • Time wrap
  • The tech bull run
  • From hobby to passion
  • Golden Years
  • An untimely reminder
  • Why change is so difficult
  • Key Strategies for equalising super