As part of its mid year economic and fiscal outlook the Federal government has announced that it will overturn a recent Tax Office ruling which sought to tax the capital gains made by superannuation funds on assets disposed of after the death of the fund member.
The effect of this measure means that the savings of a person who passes away will not be subject to tax until all the assets have been transferred or sold. The payment of the death benefit will still be subject to the current tax regime in place which is 16.5% tax on benefits paid to non-dependants (note there is no tax on death benefits received by dependants of the deceased).
These measures will take effect from 1 July 2012.
Should you wish to know more about how these changes may affect you please contact Murray Howlett of our Taxation Services Division on (07) 3023 1300.