Australia

Simulation exercise: Self-Managed Super Funds

BACKGROUND

John and Ella are members of the P&E Superannuation Fund. John is 67 and his SMSF member balance is $650,000 comprising $455,000 tax-free component and $195,000 taxable component (from a taxed fund). Ella is 68 and her SMSF member balance is $560,000 which is a 100% taxable component (from a taxed fund).

John and Ella have two children, Jake who is 40 years old and financially independent, and Kristy who is 45 years old, intellectually disabled and requires full-time care.

QUESTIONS

A. Upon John's death, his benefit is to be split 50/50 between his children Jake and Kristy.

How much tax would be payable upon Jake inheriting his share of John's death benefit? (Please base your answer on 2020/21 financial year tax rates). Explain your answer.

B. Upon John's death, his benefit is to be split 50/50 between his children Jake and Kristy.

How much tax would be payable upon Kristy inheriting her share of John's death benefit? (Please base your answer on 2020/21 financial year tax rates). Explain your answer.

C. Upon Ella death, her benefit is to be split 50/50 between her husband John and her son Jake.

How much tax would be payable upon Jake inheriting his share of Ella's death benefit? (Please base your answer on 2020/21 financial year tax rates).

D.Upon Ella's death, her benefit is to be split 50/50 between her husband John and her son Jake.

How much tax would be payable upon John inheriting his share of Ella's death benefit? (Please base your answer on 2020/21 financial year tax rates).