Publications and News

Buy-sell agreements/ life insurance/ self managed super funds

7 May 2015

It is not uncommon in buy sell agreements to have a partner/shareholder’s exit funded by a life insurance policy held by the partner/shareholder’s self managed superannuation fund.

The ATO has indicated its unhappiness about this in ATO ID 2015/10 published last Friday. It considers that such an arrangement can breach both section 62 (the sole purpose test) and section 65 (providing financial assistance to a member or member’s relative).