A death tax is still alive and well in Australia

Until we achieve immortality, we have to deal with death and taxes. But take comfort, at least Australia doesn’t have a death tax — or does it?

Many of us will leave a substantial superannuation balance when we go. While we’re busy being buried, the government will help itself to what’s left of our retirement savings by taxing superannuation death benefits.

By law, we can only leave our superannuation to a spouse, child, or dependent partner. Luckily, dependent beneficiaries can receive a super death benefit as a lump sum without having to pay tax. Receiving the benefit as an income stream will incur tax depending on both the age of the benefactor and beneficiary, and so the person receiving the benefit is advised to…