Intax --- Page: 10 : November 2006 Original article by Robert Richards
ABIX Summary
The superannuation laws in Australia were changed in 2006. From 1 July 2007, a retiree aged 60 or over will be able to take his or her super funds free of tax. The Australian Government has ruled that under the new arrangements, all lump sum death benefits will be tax-free if paid to a dependent. A payment to a non-dependent will be taxed at 15%. The thorny issue here is that an adult child is not a dependent, so money left to an adult child will be taxed at 15%, which is actually a form of death duty. Dependents include a spouse, a child less than 18 years, a person who is financially dependent on the retiree or a person who has an "interdependency relationship" with the retiree. Adult children do not usually fall into the latter two categories.
