Latest News

Hot Issues
spacer
Businesses ghosting the ATO targeted in debt collection blitz
spacer
Claiming the tax-free threshold: getting it right
spacer
Aussies tired of ‘dodgy tax criminals’, warns ATO
spacer
Protect your small business by following these essential steps.
spacer
Super guarantee a focus area for ATO business debt collection
spacer
Controversial ‘Airbnb tax’ set to become law
spacer
Withholding for foreign residents: an ATO focus area
spacer
1 in 3 crypto owners confused about tax, study reveals
spacer
20 Years of Silicon Valley Trends: 2004 - 2024 Insights
spacer
ATO reveals common rental property errors from data-matching program
spacer
New SMSF expense rules: what you need to know
spacer
Government releases details on luxury car tax changes
spacer
Treasurer unveils design details for payday super
spacer
6 steps to create a mentally healthy and vibrant workplace
spacer
What are the government’s intentions with negative gearing?
spacer
Small business decries ‘unfair’ payday super changes
spacer
The Leaders Who Refused to Step Down 1939 - 2024
spacer
Time for a superannuation check-up?
spacer
Scam alert: fake ASIC branding on social media
spacer
Millions of landlords the target of expanded ATO crackdown
spacer
Government urged to exempt small firms from TPB reforms
spacer
ATO warns businesses on looming TPAR deadline
spacer
How to read a Balance Sheet
spacer
Unregistered or Registered Trade Marks?
spacer
Most Popular Operating Systems 1999 - 2022
spacer
7 Steps to Dealing With a Legal Issue or Dispute
spacer
How Do I Resolve a Dispute With My Supplier?
spacer
Changes to Casual Employment in August 2024
spacer
Temporary FBT break lifts plug-in hybrid sales 130%
spacer
The five reasons why the $A is likely to rise further - if recession is avoided
spacer
June quarter inflation data reduces risk of rate risk
spacer
‘Bleisure’ travel claims in ATO sights, experts warn
Article archive
spacer
Quarter 3 July - September 2024
spacer
Quarter 2 April - June 2024
spacer
Quarter 1 January - March 2024
spacer
Quarter 4 October - December 2023
spacer
Quarter 3 July - September 2023
spacer
Quarter 2 April - June 2023
spacer
Quarter 1 January - March 2023
spacer
Quarter 4 October - December 2022
Estate planning considerations

Estate planning is a complex area which requires careful consideration of tax implications.

.

Many issues that affect the distribution of assets to beneficiaries will need to be considered before an individual dies, to ensure undesirable tax consequences are avoided for both the individual and their potential beneficiaries. These include the timing on the transfer of the assets, potential gifts, transfer duties and the use of testamentary trusts.

While gifts can be made as a part of estate planning before an individual dies, remember that if the gift is an asset (e.g. property, crypto assets, shares, etc), CGT will apply at the time of the gift (and the donor may have insufficient funds to pay the tax).

Another consideration in terms of the timing of transfers (in particular, of property) is the transfer duty involved at the state or territory level. For example, in New South Wales, if property is received from a deceased estate in accordance with the terms of a will, the beneficiary will pay transfer duty at a concessional rate of $100. However, if the transfer occurs before an individual’s death or not in accordance with a will, normal rates of transfer duty will apply. In that scenario, it would be better to wait to transfer the property. The rules for each state and territory differ, so it’s important to check before making decisions.

Superannuation benefits are tax to non-dependent beneficiaries – taking pensions before death are tax effective, although introduce complications in managing cash flow.

For individuals looking to exert more control after their own death, or protection or flexibility for the family, a testamentary trust may be one way of providing a flexible and tax-efficient way to manage and distribute the assets of the estate to beneficiaries. Generally, the terms and conditions of the testamentary trust are outlined in the will of the deceased, including the appointment of trustees and beneficiaries and how the trust assets are to be managed and distributed. The trust itself comes into existence upon the death of the person making the will, and it is separate from the deceased estate for legal and tax purposes.

However, establishing and managing testamentary trusts can involve significant costs, and there is a requirement to carefully draft the trust deed, so it includes clear instructions for the establishment and operation of the testamentary trust, in order to avoid possible future disputes. There may also be ongoing legal, accounting and administrative expenses, making testamentary trusts a complex route to head down.  Offsetting this are family flexibility, asset protection and tax savings, which can be significant.

The specific tax implications of estate planning can vary widely depending on individual circumstances and the state or territory in which an individual lived. This is a complex area where seeking professional advice tailored to the situation is crucial.

 

 

 

AcctWeb

Liability limited by a Scheme approved under Professional Standards Legislation.
© O'Brien and Partners 2024 - All Rights Reserved | 333 Canterbury Road, Canterbury VIC 3126 | Tel: 03 9509 3911 Site by Acctweb