Assume it is 1 July 2020 and Rick Shaw, who is 59, retired that day. Rick’s superannuation benefit is in an accumulation fund and his superannuation account balance on the date of his retirement comprises the following:

Non-concessional contributions	$150,000
Salary sacrifice contributions	$100,000
Crystallized pre-1 July 1983 segment	$150,000
Balance of benefits (taxed in the fund)	$1,000,000
Total	$1,400,000

Rick is also reviewing his will and wants to ensure that his family inherit his superannuation. He has a wife Tanya (aged 55) and two adult children, Len (aged 32) and Betty (aged 28). He currently has Tanya receiving 60% and the children receiving 20% each of his superannuation benefits listed in his binding death benefit nomination.

REQUIRED:

1. Calculate the amount of tax Rick would have to pay if he took all his benefit as a lump sum on 1 July 2020.
2. If Rick were to pass away, what would the tax implications be for his beneficiaries? Calculate any tax payable by his beneficiaries assuming the fund will only pay lump sums.

Answer rating: 100% (QA)

Ricks tax liability depends on his total taxable income for the 2020 financial year If his taxable i... View the full answer