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    Practice Statement on testamentary trusts continuing

    In an apparent reaffirmation of the Commissioner's policy, minor changes have been made to Practice Statement PS LA 2003/12. The references to the former Government's proposal to enact the policy in legislation have been removed, given that the current Government has decided not to proceed with that proposal.

    Continuation of the Commissioner's policy is very important, since it enables the assets of a deceased to pass through the deceased's estate, then to the trustees of a testamentary trust created under the deceased's will and finally to a beneficiary of that trust (perhaps many years later), without any taxing point. It is arguable that, without the Commissioner's concessionary policy, that outcome might not be achieved. That is arguable because the CGT concessions in Division 128 apply where a deceased's assets passed to a beneficiary through the executor or administrator of the estate. Under the general law, the role of executor or administrator (arrange funeral, collect assets, pay the deceased's debts, etc) is quite distinct from the trusteeship of a testamentary trust that then arises under a person's will, even though the same people often occupy both roles.

    16 Apr 2014

    Topic: Income Tax/Trusts

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