The world of superannuation continues to evolve in the most interesting ways. The ATO has just released SMSF Determination 2013/2 ruling on whether a partial commutation of a pension paid as a lump sum counts towards the minimum pension payment.
And of course we have known or a while that it does. This enables those who have an Account Based Pension to access their Low Rate Tax Threshold (currently $180,000) completely tax free even if they are between 55 and 60 years of age.
The terrifically interesting development is the answer to the question – can the lump sum be taken as an in specie payment and still count towards the minimum pension payment? Yes says the ATO. Hallelujah! What a sensible determination.
This means holders of Account Based Pensions may now elect to receive a pension payment as a lump sum and then be paid by the transfer of an asset rather than have to pay the amount in cash.
Room for effective planning and management within your SMSF!