Did you know that your children might have to pay a death benefit tax on your superannuation after you’ve passed away?

“If you leave your super to your adult children, that money could be taxed at up to 17% for every $100,000 in super,” said Simon Shepherd, the Principal Financial Planner at Providence Advisory Group.  

“The good news is that recent changes to the super rules mean that you may have the opportunity to reduce or possibly eliminate that tax.”

Simon noted that certain conditions applied to this opportunity.

“Broadly speaking, you need to be 75 years or younger and able to access your super for this strategy to be reliable,” he said.

“For example, we recently put this tax-saving strategy in place for some retired clients of ours, who have been with us for well over 10 years. They’re a married couple in their late 60s, early 70s [who are] planning to leave what’s left of their super to their three sons when they pass on.”

Simon noted that those sons were successful, had good jobs, and were “already paying lots of tax”.

“So, our strategy in this case has saved our clients almost $50,000 in death benefits tax,” he said.

“What’s even better is that we can repeat this in three years’ time for even more savings.”

Simon stressed that this is general advice that may not apply to your individual circumstances, “but you may want to look into this and act soon [because] as we know in the 30-odd years superannuation has been running, the government’s almost always changing the rules”. 

He said people considering any strategy may want to seek advice from their financial advisor or super fund accountant. Providence Advisory Group is also offering free 15-minute calls with Simon to review their financial strategy and investment costs. 

You can make a booking for fiduciary advice here. 

Simon also noted, “While you’re looking at your super, you may also want to check your administration and investment costs. If you’re paying more than around 0.8% or 0.85% [per annum], then you’re paying too much.”