Toulouse, aged 85, has $300,000 superannuation balance all of which is taxable. She also has a $700,000 life insurance policy incorporated within her superannuation policy. Toulouse does not have any surviving spouse and has only one daughter, Shilka, who is not a tax dependent family member. Toulouse has completed a binding death benefit nomination naming Shilka as her sole heir. Unfortunately, Toulouse is killed in a boating accident while returning from a riverboat cruise.

Extra information: Shilka's tax rate is 32 per cent and the full benefit is taxable.

Withholding tax rates:

Death benefit ETP paid to non-dependants - taxable component

All ages Up to the ETP cap amount 32% ETP cap

Amount above the ETP cap amount 47% ETP cap

1. How much tax will be deducted by the trustees from Shilka's inheritance?
2. What will be the total tax payable on the superannuation payout?
3. If Shilka is not satisfied with the calculation and payout, is she able to approach an organisation to formally complain and seek an alternate remedy? explain why or why not.

Answer rating: 100% (QA)

Shilkas inheritance tax deduction Shilka will inherit the 700000 life insurance benefit from her mot... View the full answer