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Jason G

Oct 23, 2023

Spouse Death - Internal Transfer

in SMSF Technical Forum

Hi, I am auditing a fund where the spouse passed away during the financial year.

Wife's account was in pension phase.
Wife's balance was transferred to Husband's, processed as an inward rollover to her husband's balance. Husband is in pension phase already.
It appears no binding death nomination exists
No evidence of reversionary pension

Is it allowable to simply transfer the deceased wife's balance to the husband's balance within the SMSF?

If not, what is the correct treatment here? What evidence should I be requesting in this case?

1 comment

Comments (1)

THE AUDITORS INSTITUTE

Oct 23, 2023

Hi Jason

Under SIS legislation a death benefit can be paid to a spouse as a lump sum and or as an income stream.

If it is a death benefit income stream it has to keep this status and cannot be converted to accumulation mode.

You should also check what the trust deed requires.

You should request paperwork to support that the trustees or trustee has decided to pay the death benefit as an income stream if there is no death benefit nomination or reversionary pension in place.

Thanks

The Auditors Institute