Tax Planning Strategy 178 – Auto Reversionary Pension

Tax Planning Strategy 178 – Auto Reversionary Pension

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.
Posted in

Similar posts you may like

  • Personal branding

    Personal branding is the practice of people marketing themselves and their careers as brands. Personal branding is essentially the ongoing process of establishing a Read more

  • 78% of tax agent-prepared returns have errorsaccounting mistakes

    That’s not just an ATO stat, it’s a wake-up call. According to the ATO’s Individuals Not in Business Tax Gap Report, a staggering 78% Read more

  • 123 BC – Tax Farming

    Tax farming was originally a Roman practice set up by Gaius Gracchus in 123 BC whereby the burden of tax collection was reassigned by Read more

  • Get a Will

    Arguably, a Will is the most important financial asset for yourself and your family. It’s worth more than your house, your car, and your 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