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Campbell McCart

May 15, 2023

PAYMENT FROM ACCUMULATION ACCOUNT

in SMSF Technical Forum

My understanding is that you can make a payment from an accumulation account if the member has met a condition of release.

EXAMPLE

Brown smsf is 100% in accumulation phase it has one member Raph Brown with an account value of $1,842,000. Ralp is 68 years of age.

As he is over 65, he has met a condition of release. Ralph wants to withdraw $42,000 and it is treated as a tax-free payment.

Question 1: Is the payment of $42,000 a Lump Sum payment?

Question 2. If it is not a lump sum payment, what type of payment is it classified as.

Question 3. What paperwork / documentation needs to be in place to make the payment?

Your advice will be appreciated.

1 comment

Comments (1)

THE AUDITORS INSTITUTE

May 15, 2023

Hi Campbell

Yes a benefit can be paid from an accumulation account if a member has met a condition of release. The benefits can be paid as an income stream or as a lump sum payment.

The condition of release rules are covered in Schedule 1 to the SIS Regulations.

In relation to your questions:

Yes the $42,000 is a lump sum payment if an income stream has not been commenced.
Yes it will be a lump sum payment if an income stream has not been commenced.
The paperwork required should be a written request from the member requesting a lump sum payment (prior to the payment being made). You should also check the trust deed in terms of what it requires.

Thanks

SMSF AAA