The ATO has issued a new ruling stating that journal entries to not satisfy the requirement to cash a superannuation death benefit, after withdrawing two recently issued rulings on the same topic: ATO ID 2015/23 Superannuation: Member’s benefits in a regulated superannuation fund must be ‘cashed’ upon death by being paid – mere journal entries insufficient.
Cashing Superannuation Death Benefits
Update: The ATO has withdrawn ATO ID 2015/2 and ATO ID 2015/3, replacing them with ATO ID 2015/23.
According to the ATO a journal entry in the financial records of an SMSF is not enough to pay a superannuation death benefit, for income tax or superannuation purposes.
This is contained in two related Interpretative Decisions, ATO ID 2015/2 and ATO ID 2015/3:
- ATO ID 2015/2 Superannuation: superannuation benefits: Journal entry insufficient to constitute payment of a death benefit
- ATO ID 2015/3 Superannuation: death benefits: a member’s benefits must be ‘cashed’ upon death