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My mother has passed intestate and her superfund has determined to pay 100% of her super to her spouse, my step father. My step father intends dividing the super keeping 20% for himself and paying my mother's 4 adult children each 20%.
Can you advise whether it is appropriate I consider this as gifted funds and do not pay tax on my 20%, or should I pay the ATO the applicable tax which I believe is 15% of the inherited super funds?
Responses
Hi Tim,
This will be gifted money from your step father. The beneficiary of the super payout is your stepfather, since he was your mother's spouse he will receive the super benefit tax free.
The gift from your step father to you will also be tax free.
Regards
James
HI Tim,
What James said is accurate but to give you a little background there are specific reasons why there are free.
Payments from a Superfund to a Dependent tend to be tax-free. If you received the money directly from the fund then you may have to pay some tax. So this is a good thing.
The money from your Step Father top yourselves is considered a gift and there is NO gift tax in Australia.
However be careful because the money your Step Father received and then gave away can still be counted as his assets for the purpose of assessing the aged pension. Just because you give it away does NOT mean it cannot be counted in your Assets.
Thanks
AJ
Hi Tim,
If that is the case, and I don't know if you can, then you would probably have to pay Tax on your distribution as you were a non-dependant.
You probably need to spend some time with someone and run the numbers and assess all the facts and find out what is the best what and how this will impact your step father.
It depends on his age, it depends on his other assets. I mean the Super would have been included when assessing him and your mother in the past anyway BUT saying that there are different levels for a couple as opposed to a single person.
If you want some actual advice happy to book you at a time. In the mean time I would just go and get all the facts together and do some research on the net.
AJ
Thankyou Andrew, do you think it might be prudent to petition the superfund to change their decision and pay my step father and 4 adult children 20% each so as to avoid my step father's pension or aged care financial assessment being impacted? Is this something that s likely to work do you think?