This paper deals with the taxation consequences of the death of a member of a SMSF. Issues arising with death benefits are demonstrated by way of case studies. In particular the paper reviews:
- the rules relating to the payment of death benefits
- the tax consequences of payment including a consideration of Lump Sum Death Benefit ETPs
- the tax consequences of non excessive and excessive components of death benefit ETPs including RBL considerations
- the payment of pensions after the death of a member
- if an SMSF can pay pensions to children and any estate planning opportunities that might exist
- the tax consequences of a life insurance payout received by a deceased estate
- binding death benefit nominations.