Trusts in the Estate Plan: Watch the Tax on the Way Out – a recorded lunchtime online conference

Duration: Approximately 2.5 Hours

Hear from the experts at this online conference. You can watch it on your computer or on your portable electronic device from anywhere.

The conference will be based on our highly successful video webinar technology: there'll be a chairperson and presentations.

One registration can be shared by colleagues within the same firm utilising the same login.

THE PROGRAM

Session 1: Testamentary Trusts: Don’t Let Paying the Minimum Rate of Tax Turn into the Highest

A relatively recent tax law change is to only allow concessional tax treatment on the income distributed to minors from TTs if the income is derived from assets related to the property of the deceased. This change is providing some challenging scenarios for accountants, with this session exploring the issues, including:

• What is “excepted” income in a TT?
• When will income in a TT not attract concessional tax rates?
• How to calculate excepted income when a TT includes assets unrelated to the deceased?
• How are dividend reinvestment plans treated?
• Does a TT borrowing funds to invest affect the taxing of income on the assets acquired with the borrowed funds?
• How assets in a TT that are unrelated to the deceased estate can cause compounding issues requiring ongoing tracing requirements
• What are the differing tax rates and eligible tax offsets that can apply on TT distributions to children under 18?
• Practical examples and tips for managing post death asset

Session 2: Disclaiming an Entitlement to Trust Income? Watch Out for the Estate Plan

The recent High Court decision in FCT v Carter has changed the interpretation of when a disclaimer by a beneficiary of an interest in trust income is effective for tax purposes. The decision may lead to some unpleasant outcomes for beneficiaries taking this course of action and can upend even the most carefully laid out estate plan. This session delves into the estate planning implications of disclaimers, including:

• The then and now:

• Background to the ATO’s views (ATO ID 2010/85)
• Review of FCT v Carter [2022] HCA 10

• The types of situations where beneficiaries may feel the need to disclaim their interests
• If a trustee acknowledges a disclaimer of a beneficiary’s interest in income, who pays the tax on that income?
• How a default beneficiary can effectively disclaim a trust interest for tax purposes
• Action to take if a beneficiary wishes to be removed from their association with a trust
• The CGT implications of:

• a surviving spouse disclaiming a share in spouse’s deceased estate in favour of the children
• a surviving spouse disclaiming a life interest in favour of the children
• a beneficiary of a discretionary trust renouncing their interest (TD 2001/26)

• Case study – control of trust to daughter with son wishing to step away

Session 3: Section 100A and the Estate Plan – How Far Will the ATO Push?

It could be said that the ATO’s recent release of guidance material regarding reimbursement agreements and section 100A has left estate planners with more questions than answers. This session focuses on the impact section 100A may have on the estate planning process, including:

• An overview of ATO guidance material (TR 2022/D3, PCG 2022/D1 and TA 2022/1)
• Has the ATO guidance material impacted the estate planning process?
• Could some discretionary trusts in the estate plan be ticking time bombs?
• School fees for minors paid from grandparent distributions – is this ok or is it the parent getting the benefit?
• Are there issues if a beneficiary dies with an unpaid present entitlement
• The testamentary trust example 1 in TR 2022/D1 gets tick of approval “”absent the facts”. When could the tick become a cross?
• How to manage trust distributions moving forward to minimise section 100A risk and ensure the benefit is received by intended party
• Practical examples