Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-30 - SUPERANNUATION  

Division 294 - Transfer balance cap  

Subdivision 294-E - Modifications for death benefits dependants who are children  

Operative provisions

SECTION 294-200   Cap increment - child recipient on or after 1 July 2017, deceased had transfer balance account  

294-200(1)    
A cap increment arises if:

(a) on a day (the starting day ) on or after 1 July 2017, you start to be the *child recipient of a *superannuation income stream; and

(b) the deceased had a *transfer balance account just before death.

Income stream fully funded by deceased ' s retirement phase interests

294-200(2)    
If the *superannuation interest that supports the *superannuation income stream is wholly attributable to one or more superannuation interests of the deceased that were in the *retirement phase, the amount of the cap increment equals the amount of the *transfer balance credit that arises in your *transfer balance account in respect of the *superannuation income stream.

Income stream fully funded by deceased ' s accumulation phase interests

294-200(3)    
If the *superannuation interest that supports the *superannuation income stream is wholly attributable to one or more superannuation interests of the deceased that were not in the *retirement phase, the amount of the cap increment is nil.

Note:

A superannuation income stream covered by this subsection will generally result in excess transfer balance. The exceptions are: where you have additional cap increments under section 294-190 or 294-195 , or where you have a higher cap under subsection 294-185(2) because you also receive a non-death benefit income stream.

Income stream partly funded by deceased ' s accumulation interests

294-200(4)    
If the *superannuation interest that supports the *superannuation income stream is:

(a) in part (the retirement phase part ) attributable to a superannuation interest of the deceased that was in the *retirement phase; and

(b) in part attributable to a superannuation interest of the deceased that was not in the retirement phase;

the amount of the cap increment is so much of the *transfer balance credit that arises in your *transfer balance account in respect of the superannuation income stream as represents the retirement phase part.

Note:

A superannuation income stream covered by this subsection will generally result in excess transfer balance. The exceptions are: where you have additional cap increments under section 294-190 or 294-195 , or where you have a higher cap under subsection 294-185(2) because you also receive a non-death benefit income stream.

Reduced increment for excess transfer balance

294-200(5)    
Despite subsections (2) and (4), the cap increment is reduced if there was *excess transfer balance in the deceased ' s *transfer balance account just before death. The amount of the reduction is:

(a) the proportion of the excess transfer balance that corresponds to your share of the deceased ' s *superannuation interests that were in the *retirement phase; less

(b) the amount of any *superannuation lump sum paid to you, because of the death of the person from a superannuation interest of the deceased that was in the retirement phase.

When cap increment arises

294-200(6)    
The cap increment arises:

(a) on the starting day, unless paragraph (b) applies; or

(b) if you are a reversionary beneficiary - at the end of the period of 12 months beginning on the starting day.

Treatment of investment earnings after death

294-200(7)    
For the purposes of working out under this section the extent to which a *superannuation interest is attributable to another superannuation interest, if:

(a) a superannuation interest of the deceased was in the *retirement phase; and

(b) on or after the death of the deceased, an amount of investment earnings is added to the superannuation interest;

the superannuation interest is taken to include that amount of investment earnings, except to the extent that the amount of investment earnings includes an amount paid under a policy of insurance on the life of the deceased or an amount arising from self-insurance.