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Peter Townsend

Is a super withdrawal just before death tax-free? This is the ATO view

A recent ruling may have implications for SMSFs for an inheritance strategy recommended by many advisers.

Peter TownsendContributor

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A recent decision by the Australian Taxation Office gives an insight into what happens when an entire superannuation balance is withdrawn just before the super member’s death.

More advisers are suggesting an “imminent death” withdrawal as a way of saving tax. This is a controversial issue because, depending on exactly how the withdrawal occurs, the withdrawn amount might be a member’s benefit (generally attracting no tax) or a death benefit which could, depending on who it is given to, attract income tax.

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Peter Townsend is principal of Townsend Business & Corporate Lawyers.

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    Original URL: https://www.afr.com/wealth/personal-finance/is-a-super-withdrawal-just-before-death-tax-free-this-is-the-ato-view-20230806-p5duci