Both death and taxes can be costly, stressful and time consuming. When it comes to dealing with tax implications on estate planning, or in the unfortunate event of someone’s passing, there can be additional pressure if appropriate tax advice and planning is not undertaken prior.

In preparing to deal with both inevitable matters, there are several considerations when it comes to tax implications and estate planning.

As the tax landscape is ever-changing, considering the effects of tax implications on any estate plan is not a set-and-forget exercise. It is important to regularly seek professional advice to review your estate plans if changes in legislation have altered the once expected outcome.

Some of the key tax matters to be considered when it comes to estate planning include:

• distributions and loans;
• testamentary trusts;
• discretionary trusts; and
• specific assets including the family home.

Essentially, any movement or transaction of money or other assets between parties may have tax implications on the estate and planning is imperative.

Distributions & Loans

When it comes to the tax effects of distributions and loans in an estate plan, you may need to consider:

• Division 7A, Section 100A and Other Inter Entity Loan Issues
• Family Trust Elections
• Trustee Distributions and Discretion

Testamentary Trusts & Discretionary Trusts

Dealing with testamentary trusts and discretionary trusts in an estate can bring additional tax considerations.

• Tax Treatment of Assets in Testamentary Trusts – rules have changed regarding what is considered ‘excepted trust income’. This makes it harder for those who were using testamentary trusts to take advantage of tax concessions.
• Understand when the assets of a testamentary trust are taken to be the assets of the beneficiaries.
• Is trust splitting still allowed?
• Consider the factors that trigger, and implications of, a trust resettlement.

Tax Impacts on Specific Assets in an Estate Plan

There are many varied components that may be applicable regarding dealing with the tax considerations on any specific assets within an estate plan.

• Superannuation strategies – what are the applicable tax implications for the estate both prior to, and following, death?
• Is there a business in the estate plan? What are the tax considerations regarding the business?
• Tax consequences for the family home depending on how the interest in the property is transferred, or if it is realised (sold).

Expert Tax & Estate Planning Advice in One Convenient Location

Considering the effects of tax implications on any estate plan is not a set-and-forget exercise.

Contact avance on 1300 620 345 or email us at info@avance.com.au to arrange a meeting to discuss your individual needs.