Anti-detriment Payment SMSF

What is Anti-detriment payment and how does it affect your SMSF?

An anti-detriment payment is an additional lump sum payment that can be made from a complying super fund on the death of a member to a:

  • Trustee of the deceased estate
  • Spouse or former spouse of the deceased
  • Child (including an adult child) of the deceased.

An anti- detriment payment is not available where the death benefit is paid as a pension.

The anti- detriment payment increases the deceased member’s lump sum death benefit to negate the effect of tax while the member’s benefit was accumulating in the fund. If the SMSF pays an anti-detriment payment, the trustee can claim an income tax deduction.

To ensure this claim is made correctly, trustees must claim the deduction in the financial year in which the lump sum is paid. The lump sum should be paid as soon as practicable following the death of the member.

This deduction can be used to reduce the tax payable by the fund in the year of the payment. Alternatively, if a tax loss is generated, it can be carried forward to future years. Trustees of SMSFs should consider whether the fund is expected to generate sufficient taxable income to use this deduction.

ATO recommends you seek advice from a licensed financial adviser, accountant or your tax agent before making any anti-detriment payments.

For any SMSF questions, please contact SuperHelp on 1300 736 453.

Article Disclaimer: This information should not be considered personal financial advice as it is intended to provide general advice only. The article has been prepared by Superhelp Australia Pty Ltd without taking into account your personal objectives, financial situations or needs.

The information contained in the article may not be appropriate to your individual needs therefore you should seek personal financial advice before making any financial or investment decisions.