I came across an interesting private tax ruling.
A lady who was over the age of 65 had a Will leaving her estate to her 3 independent adult children.
She had $1.5 million in superannuation, mostly concessional contributions.
On her death, between them, her children stood to lose 15% in tax, a total of about $200,000.00.
However, 5 days before she died, she signed a full cashing request which converted her superannuation to a lump sum debt.
Because she was over 65, no tax was payable. She became presently entitled to all the super, and even though the money was not paid into her bank account until after her death, the children inherited $500,000 tax-free, and the ATO missed out on $200,000.00.
Contact us if you are:
- over the age of 65;
- have a SMSF; and
- would like to minimise the tax paid to the ATO on death, with some documents that can be prepared in advance.
For tax-effective estate planning, see Michael Paterson & Associates.