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

Published on 01 Aug 11 by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE

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
Current at 24 August 2011 Click here to expand/collapse more articles by Kaylene HUBBARD.
 
Phillip Browne
Current at 29 February 2012 Click here to expand/collapse more articles by Phillip Browne.

 

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