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September 2025 SMSF newsletter

Which SMSF expenses are tax deductible?
The expenses associated with running your own super fund can add up, so it’s important to understand which expenses you can, and can’t, claim as a tax deduction. Read more.
Which SMSF expenses are tax deductible?
The expenses associated with running your own super fund can add up, so it’s important to understand which expenses you can, and can’t, claim as a tax deduction. Read more.
Preparing for the annual meeting with your SMSF’s accountant
If you use an accountant to prepare your SMSF’s end-of-year compliance tasks, having the right documentation on hand will save time and money. Read more.
Preparing for the annual meeting with your SMSF’s accountant
If you use an accountant to prepare your SMSF’s end-of-year compliance tasks, having the right documentation on hand will save time and money. Read more.
How to deal with lost paperwork in your SMSF
What SMSF trustees need to consider when important fund documentation is misplaced. Read more.
How to deal with lost paperwork in your SMSF
What SMSF trustees need to consider when important fund documentation is misplaced. Read more.
Dealing with an ATO breach notice for your SMSF
If your SMSF comes to the attention of the ATO for the wrong reasons, don’t panic; swift remedial action is generally the best policy. Read more
Dealing with an ATO breach notice for your SMSF
If your SMSF comes to the attention of the ATO for the wrong reasons, don’t panic; swift remedial action is generally the best policy. Read more
How do I transfer a UK pension to an Australian super fund?
It can make sense to bring your UK pension funds home to Australia, but the process is far from straightforward. We explain how it’s done. Read more.
How do I transfer a UK pension to an Australian super fund?
It can make sense to bring your UK pension funds home to Australia, but the process is far from straightforward. We explain how it’s done. Read more.

SuperGuide members Q&A: September 2025

Thursday 18 September 2025 at 11:00 am AEST

In this webinar super expert Garth McNally answers recent questions from SuperGuide members.

Q: A member of a SMSF has completed a Binding death benefit nomination. The property in the SMSF will be passed onto the grandson. How much tax does the SMSF have to pay for this transaction after the member becomes deceased?

A: Tax on death benefits is determined based on whether the recipient is a dependant (according to the definition in the Income Tax Assessment Act) on the date of the member’s death.

If the benefit is paid directly from the SMSF to a non-dependant the fund will be required to withhold tax at the rate of 17% from any taxable component (taxed element).

If the property is to be transferred in-specie to the beneficiary (i.e. as real property, without being sold) and they are not a dependant, sufficient liquid assets will also be required to pass to them from the fund so that tax can be withheld from the total value of the benefit.

For example, if the property is worth $500,000 and cash of $150,000 is paid in addition, the total benefit is $650,000. If the entire benefit is taxable (taxed) component, the required tax is $110,500. There is sufficient cash available in the total benefit from which this amount can be withheld.

If there is no cash, or insufficient cash, in the benefit from which to withhold tax, it will not be possible to transfer the property in-specie. The property will need to be sold to finance payment of the death benefit so the required tax can be withheld.

Alternatively, if the member makes a new binding nomination in favour of their legal personal representative (the executor of their estate) the death benefit can be paid into the estate to be distributed from there. Then, the SMSF is not required to withhold any tax and the tax liability passes to the estate. Other estate assets could potentially be used to finance the payment of tax. No Medicare Levy applies in this scenario, so the tax on taxable (taxed) elements reduces to 15%

Note that so far, we have only considered death benefit tax to the beneficiary/estate. If assets are in accumulation phase, there may also be tax on capital gain to be paid by the SMSF when the fund disposes of the asset.

As this is a complex area, advice from an SMSF specialist accountant and/or solicitor may be required.

Learn more about tax on death benefits.

With less administrative demands at this time of the year, it can be a good time to review the investment performance of your SMSF.

SuperGuide publishes median super fund and pension fund performance data so you can benchmark your fund against the public super funds.

Important: All information on SuperGuide is general in nature only and does not take into account your personal objectives, financial situation or needs. You should consider whether any information on SuperGuide is appropriate to you before acting on it. If SuperGuide refers to a financial product you should obtain the relevant product disclosure statement (PDS) or seek personal financial advice before making any investment decisions.

Superguide Pty Ltd ATF Superguide Unit Trust as a Corporate Authorised Representative (CAR) is a Corporate Authorised Representative of Independent Financial Advisers Australia, AFSL 464629.