Revenue aspects of testamentary trusts

5.7      Amendments arising out of the Bamford decisions. 19

5.8      The new legislation. 20

5.9      Important conceptual and practical consequences of the new legislation for capital gains, franked distributions and franking credits– goodbye Division 6. 21

5.10       Important conceptual and practical consequences of the new legislation for capital gains, franked distributions and franking credits– hello new regime. 21

5.11       How does a beneficiary become specifically entitled to an amount of a capital gain or an amount of a franked distribution?. 22

5.12       Possible advantage for testamentary trusts over inter vivos trust if the “two month” deadline is missed. 24

5.13       The role of the trust deed in making a beneficiary specifically entitled – including an express streaming power. 25

5.14       The role of the trust deed in making a beneficiary specifically entitled – defining “income” for the purposes of the trust deed. 26

5.15       Amending trust provisions – “resettlement” of the trust fund for CGT purposes?. 28

6     RECENT DUTY DEVELOPMENT. 30

Section 42 and testamentary trusts. 30

 

 

1   SCOPE OF THE PRESENTATION

The topic of testamentary trusts in succession planning is a broad one. This presentation looks at some topical revenue law issues of relevance to practitioners who deal with testamentary trusts as part of their succession practices, but who do not necessarily have an advanced knowledge of taxation law.

The focus is on those testamentary trusts which are essentially “discretionary” trusts, in that a broad discretion is granted to the trustee to determine entitlements to income and/or capital amongst the members of a class of beneficiaries.

In particular, the analysis is intended to address the basic elements of testamentary trusts which are relevant from a revenue law perspective and to highlight some recent issues of importance to succession law practice, rather than to be exhaustive.

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