This step-by-step guide will help you, as trustee of your SMSF, to comply with the tax and superannuation laws when paying a lump sum to a member. This guide does not cover:
- Lump sums made after the death of a member. We consider this to be a specialist area – please seek advice from an SMSF Specialist Advisor.
- Lump sum payments made from a member’s pension account.
- Rollovers or transfers to another super fund.
Disclaimer: This guide does not seek to provide personal advice specific to your needs, it is intended only as a guide for illustrative purposes only. We encourage you to seek advice from an SMSF Specialist Advisor.
WARNING – Penalty tax on early access to superannuation It is important that as trustee, you are aware that all members of your SMSF can only access their superannuation when they are entitled to. Any superannuation accessed early is included in the member’s assessable income and taxed at their normal marginal tax rates. The ATO can impose additional penalties and disqualify you from being trustee of your SMSF if benefits are paid in breach of the superannuation payment standards.
Lessons associated with this course are reserved for members of our free community and SMSF Connect members.
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Question 3 – Ensure the member understands the financial, tax and social security consequences of drawing down a lump sum?