Tax Planning Strategy 178 – Auto Reversionary Pension
A reversionary pension is a pension that is paid to a member and on the death of the member continues to be paid to an eligible dependent of the deceased i.e. their spouse or child under the age of 18.
The advantages of an automatic reversionary pension are:
- Removes the need for trustees to cash out (payout) the deceased member’s benefits. Without a reversionary pension, the SMSF trustees must cash the deceased member’s benefits ‘as soon as practicable’ after death. This cash out requirement can result in the fund having to sell large illiquid assets like property.
- Provides the deceased with certainty that their entitlements will continue to be paid as a pension to their nominated beneficiaries.
- Allows the streaming of various superannuation interests with different tax attributes to different beneficiaries.
Similar posts you may like
- Get paid what you’re worth
Underpayment can significantly impact your personal finance over your career. For example, if you are underpaid by just $50 per week for 50 years, Read more
- Shelf Company
A shelf company is a company that has not traded and historically has had no activity. In the past it could take up to Read more
- Taxation and Federation (1901)
At Federation in 1901, the Australian Constitution granted the Commonwealth a monopoly of customs duties and excises and the power to levy other taxes Read more
- Raise Your Prices 10%
Raising your selling prices will increase sales when your product or service has an inelastic demand curve i.e. when you raise prices and there Read more
"You’d be stupid not to try to cut your tax bill and those that don’t are stupid in business"
- Bono: U2