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Death and taxes: the “threat” of CGT event K3


The manner in which the CGT legislation applies in the event of death is not as certain as it may appear, particularly in the case of non-resident beneficiaries to a deceased estate. In this article, the authors outline the consequences under Australian legislation for a non-resident beneficiary of the estate of an Australian resident taxpayer and, indeed, any resident beneficiaries of that same estate.

The article shows that there may be an unfortunate consequence, namely, the taxation of an unrealised capital gain on death, where thought is not given to planning and drafting in the case of an estate which has a non-resident beneficiary. Drafting and non-drafting techniques are discussed which may alleviate that threat. The article also considers the impact of the announcements in the 2011 federal Budget in relation to the application of taxation law to deceased estates and, in particular, in relation to CGT event K3.

Author profiles

Kaylene Hubbard ATI
Kaylene is a highly experienced law graduate and solicitor with a special interest in taxation law. Kaylene worked previously as a partner at Deloitte and now provides taxation advice for CABEL Tax clients. In her role as tax partner, Kaylene leads CABEL Tax in challenging the status quo for tax advisers to achieve financial benefits for clients. Kaylene has a Bachelor of Arts/Bachelor of Laws from Macquarie University, and a Postgraduate Diploma in Commerce from the University of NSW. Kaylene is a solicitor of the Supreme Court of NSW and an affiliate member of Chartered Accountants Australia and New Zealand. - Current at 11 January 2017
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Phillip Browne CTA
Philip is the Managing Partner with CABEL Partners. - Current at 13 April 2017
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