The Government has released draft legislation that allows the tax exemption given to superannuation pensions to continue on a member's pension balance after they have died. Generally, this will mean that the superannuation balance that was used to support the deceased pension will not attract any income or capital gains tax.

This will provide tax relief for many tax payers and non dependent beneficiaries who have large unrealised capital gains in their superannuation funds. According to the proposed legislation as long as the superannuation balance of the recently deceased is paid out as 'as soon as it was practicable' the tax exemption will stay in place.