Tom, a 60-year-old widower, plans to retire on 1st September 2020 with a balance in his HESTA superannuation of $300,000.

This comprises of a Tax-free component of 20% and a Taxable component of 80%. Tony has a 30 year old daughter called Jess, who live separately.

Assumptions:

• Tom is able to utilise the re-contribution strategy

• Tom is eligible to make personal non-concessional contributions

• Tom is eligible to utilise the 3 year bring forward rule

• Jess is non-dependant on Tom

• Include the Medicare Levy in your tax calculations

If Tom dies and the trustees were to pay this balance of $300,000 to his daughter Jess:

1. What is the amount net of tax that Jess would receive?

2. Tom wants to ensure that Jess receives the entire amount tax-free. Clearly explain the strategy that Tom could utilise, whilst still alive, in order to accomplish this goal.