How do we avoid this one?
The process of removing the funds from SMSF prior to death could be a bit hit and miss or maybe I missed it.
I have a wife and 2 independent children and at 70 I think its best I prepare.
I did not know this tax existed until this mornings article.
"I am a married self-funded retiree receiving no Centrelink benefit except for the Commonwealth Seniors Health Card. I am thinking of withdrawing all of my super and putting it in term deposits to avoid the uncertainty of the super system, having suffered considerable losses in the GFC. Is there a limit to how much I can withdraw as a lump sum in any financial year? Do you see any pitfalls in doing this apart from maybe paying a little tax?
I am trying to avoid the 17 per cent death tax, which you have mentioned in various columns, if my superannuation goes to a non-dependant when I die.
There is no limit to the amount of superannuation you can withdraw tax-free once you reach 60 and while I agree that it's prudent to avoid the 17 per cent death tax by exiting the superannuation system before you die, you don't want to do it before you need to. You have given no indication of your age but keep in mind that cash is not expected to produce the same long-term returns as a diversified portfolio. Therefore the potential cost of being out of the market may be higher than any tax you may be forced to pay by leaving the superannuation system."
