Newspaper article Coffs Coast Advocate (Coffs Harbour, Australia)

Cut Pain of 16.5% Death Tax

Newspaper article Coffs Coast Advocate (Coffs Harbour, Australia)

Cut Pain of 16.5% Death Tax

Article excerpt

Byline: NOEL WHITTAKER Director of Whittaker Macnaught Pty Ltd

RECENTLY I have received a number of emails asking about the death tax of 16.5% on the taxable portion of a superannuation payout that is left to a non-dependant.

In this context, a spouse is always a dependant, whether they are working or not.

One way to lessen the death tax is to reduce the taxable portion of your super.

This is usually done by withdrawing funds once you reach 60, when withdrawals become tax free, and then recontributing them as non-concessional contributions.

Advice should be taken, as there are heavy penalties for exceeding the caps, and it is not possible to do this once you reach 65 unless you can pass the work test.

Recently I recommended to a reader that they simply withdrew their superannuation tax-free before death, as this would avoid any death tax that would be payable on it, but they wondered how this could be done in view of the fact that few people know the date they are going to die. …

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