You recently commented on the tax implications when a super fund has to be disposed of. In our case, on the death of the survivor, the funds go into a trust where the trustee disposes of them to nominated charities. Is there any tax relief from the death tax of 17 per cent payable to a non-dependent which in this case would be the charities?

Leigh Mansell, technical director of Heffron says when it comes to the tax treatment of the super received by a deceased’s estate, the tax law includes look-through provisions.

This means a super death benefit paid to the deceased’s executor is taxed in the same way it would be taxed if it had been paid directly to the beneficiary – the taxable component of the death benefit payment is subject to tax to the extent the estate beneficiaries are tax dependants or non-tax dependants of the deceased.

Even death won’t save you from the tax man.Credit: Simon Letch

The tax law prescribes who a deceased’s tax dependants are, and it’s a short list comprised of the surviving spouse and minor children of the deceased, and anyone who was financially dependent on or in an interdependency relationship with the deceased at the time of death.

Charities do not appear on this list – so a charity would be a non-tax dependant beneficiary – which means the taxable component of any super death benefit received by the estate will be subject to tax to the extent the funds ultimately pass to the charity.

Mechanically this means the........

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