Question
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
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:
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Tom is able to utilise the re-contribution strategy
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Tom is eligible to make personal non-concessional contributions
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Tom is eligible to utilise the 3 year bring forward rule
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Jess is non-dependant on Tom
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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.
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