Tax Aspects of Passing on the Estate to the Next Generation – a recorded lunchtime online conference

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 assets

Session 2: Trusts: Divvying up the Spoils of Non-estate Assets

Part of the estate plan may include reviewing non-estate assets such as discretionary trusts, and to put thought into how the control and benefits of those assets can be passed on to the next generation. This session delves into the issues to ensure the tax aspects of that planning are considered, including:

• What is trust splitting?
• In what family situations may trust splitting be considered?
• What are the CGT consequences of a trust split?
• When can a trust split result in a resettlement?
• Can a trust vest before the deed’s vesting date?
• What are the CGT consequences of vesting a trust? (ie. when can CGT events E1, E5 and E7 apply?)
• Are there other tools available in the estate planning toolbox to divvy up trusts and if so, what are the tax implications of using? ie.:
  • Trust cloning
  • Umbrella trusts
• Practical examples

Session 3: Ensuring Tax Losses Don’t Get Lost on the Way Out

When an individual passes away so do their losses. This may create opportunities in the estate plan to review losses, both tax and capital, for not only the individual but also any associated entities, to ensure if possible, the optimum tax result can be obtained from those losses. This session explores the impact of death on losses, including:

• Strategies to utilise unused losses for an individual
• Does death of a “test individual” have an impact on a trust utilising tax losses?
• Does death of a shareholder have an impact on a company utilising tax losses?
• Are shares transferred from a deceased estate to a testamentary trust via a will “beneficially owned” for the continuity of ownership test?
• What happens to carried forward tax and capital losses when an entity restructures?
• Can you restructure to tax effectively use up unused losses?
• How the tax loss rules apply to deceased estates and testamentary trusts
• Practical examples