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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 joined KPMG in the Greater Western Sydney Office with the Enterprise Tax team in October 2016. She is a highly experienced Law Graduate and Solicitor with a special interest in taxation law and advising both private clients and their groups, and larger corporates. Kaylene is a former partner of Deloitte, and more recently a Tax Advisory Partner with a smaller accounting firm. She has experience spanning 20 years in providing high level taxation advice, presenting on topical tax issues to industry and the professions, and writing technical papers and journal articles. - Current at 14 June 2017
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Phillip Browne CTA
Philip is the Managing Partner with CABEL Partners. - Current at 01 March 2012
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