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01 Aug 13 Does commutation of an account based pension count towards the minimum annual amount? - SMSFD 2013/2

On 31 July 2013, the ATO issued Self Managed Superannuation Funds Determination SMSFD 2013/2 entitled "Self Managed Superannuation Funds: does a payment made as a result of a commutation of an account based pension count towards the minimum annual amount required to be paid under paragraph 1.06(9A)(a) of the Superannuation Industry (Supervision) Regulations 1994?"

The Determination states:

"A payment made as a result of a partial commutation of an account based pension1 (other than a transition to retirement income stream) counts towards the minimum annual amount required to be paid under paragraph 1.06(9A)(a) in the Superannuation Industry (Supervision) Regulations 1994 (SISR 1994), unless the payment is rolled over within the superannuation system on or after 6 June 2009. An amount rolled over before 6 June 2009 may also count towards the minimum annual amount required to be paid under that paragraph.

...A payment made as a result of a full commutation cannot count as the account based pension ceases before the payment is made. [Footnote: This is consistent with the view in Taxation Ruling TR 2013/5 Income tax: when a superannuation income stream commences and ceases. The Ruling explains (at paragraph 23 to 26) that a superannuation income stream that is an account based pension ceases when a valid request for a full commutation takes effect and therefore ceases before the lump sum payment is made.]"

 


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