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Mihir dhanesha

Mar 14, 2024

SMSF holding foreign insurance policy

in SMSF Technical Forum

Hi team,

We have an SMSF for audit that has taken an insurance policy from an Indian company. The super fund has individual trustees and the policy is in the name of the individuals. The super fund has provided a declaration of trust confirming that the policy has been taken on behalf of the super fund and not in personal capacity of the members.

Would this be allowed as per the rules? If it is allowed, would such premium be an allowable expense?

Thank you,

Mihit

1 comment

Comments (1)

THE AUDITORS INSTITUTE

Mar 14, 2024

Hi Mihit

I have not come across such a foreign based insurance policy before. In my view there is no issue with a SMSF paying for life insurance with an Indian Company. You have noted the paperwork does not refer to the Super Fund as the policy owner so you have obtained a declaration of trust re the Fund being the owner. Preferably the paperwork would be updated to show the Fund as the owner of the insurance policy.

The life insurance would be an allowable deduction in the same way as if it had been paid to an Australian company.

I note that the deductibility of insurance premiums are complicated and are summarised in the 2023 annual return instructions. The annual return instructions re deductibility of insurance premiums can be found at:

https://www.ato.gov.au/forms-and-instructions/self-managed-superannuation-fund-annual-return-2023-instructions/instructions-to-complete-your-annual-return/section-c-deductions-and-non-deductible-expenses-item-12?anchor=SectionCDeductionsAndNonDeductibleExpens#F1andF2Insurancepremiumsmembers

Thanks

The Auditors Institute