The answer is yes, but how you do it could make all the difference to potential inheritance top-ups later.
Q: My self-managed super fund is in pension phase, but I would like to make a large withdrawal of $500,000. Would I be better off taking this as a lump sum or as part of a pension? If I take this as one amount, how will it affect my tax-free balance as either a lump sum withdrawal or a pension payment? Gordon.
For instance, do you have a spouse with super that may come to you as a death benefit? Or is it likely you may wish tofrom a future sale of your home? Does your super fund have the cash to pay out the $500,000, or will you be looking to make an in-specie transfer of assets?transfer balance capGenerally, the easiest way to take a $500,000 payment from your super if you have the cash is to treat it as a pension payment, Sanderson says.
To treat super as a lump-sum payment and leave room in your transfer balance cap would require $500,000 less the minimum pension to be rolled back to accumulation phase then paid out as a lump-sum amount from the accumulation account. This amount will be tax-free. You must also report when the balance from a retirement phase income stream is transferred back into an accumulation account .
One big reporting change from July 1 is SMSFs will be required to report any transfer balance account events within 28 days of the end of the quarter in which the event occurs.Regarding the super in your pension where the investment earnings are tax-free, Sanderson says it makes no difference whether the amount is taken as a lump sum or pension payment.
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