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Under current rules, a high-earning individual could channel their business or investment profits through a trust and distribute it to family members with no or little incomes, such as adult children or a stay-at-home spouse.

But Australians leaving money for their families after they die could also be captured by the new tax, prompting the Coalition to decry it a “death tax”.

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Seems that Labor may be looking at how to fix the faulty part of this.

Bobby. wrote Yesterday at 9:25am:


I suspect that nobody has much outside the 1% of trust users who have one and their slimy advisers have.

Dnarever wrote Yesterday at 9:13am:


So if a testamentary trust is taxed at adult rates, how do they avoid taxation?

Dnarever wrote Yesterday at 10:07am:


Now then ...  that would certainly apply, but it is a family trust not a testamentary trust. And it means that the money belongs to the recipients, not to the trustee who distributes it. That mean the beneficiaries would be able to sue to recover their money, if it was withheld. So these people would gladly live on $25k a year? 

Dnarever wrote Yesterday at 10:21am:



Ah you suspect. It shows the level of your knowledge.

lee wrote Yesterday at 1:20pm:


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Not correct - the example specifically applies to a testamentary trust in fact a testimentary trust is a type of family trust designated from a will. They are both treated almost identically in terms of taxation. The only real difference is in how they are formed.  Basically if the creator is dead, alive or a business.

A fixed family trust is less common and used differently.

Dnarever wrote Yesterday at 2:26pm:


Yes a non fixed testamentary trust, as described by you, is 0.1% of 1% or 0.00001% at 30%, or 0.000003%. And they expect to make millions.

So then what is the cost of collection? I mean they will have to be audited, won't they?

Rather than attacking 0.1 percent of the population how much more money could be saved dealing effectively with corruption in political parties rorts?


“ Public anger surrounding Australian politicians' tax and expense claims recently peaked during a massive travel expenses saga. Lawmakers billed taxpayers millions for family travel, lavish work trips, and sporting events. This sparked significant backlash and forced the Independent Remuneration Tribunal to heavily restrict politicians' travel perks.The recent saga, expense rules, and key regulatory changes include:The Federal Travel SagaThe Incidents: High-profile parliamentarians, including Minister for Sport Anika Wells, Trade Minister Don Farrell, and Greens Senate Leader Sarah Hanson-Young, came under fire for expensive family travel entitlements. For example, Wells expensed over \(\$94,000\) in flights to a UN social media summit in New York and charged taxpayers for family attendance at sporting events.The Response: While politicians defended the trips by stating they fell within existing guidelines, the scale of spending triggered severe public backlash.Entitlement Rules and ScrutinyFamily Travel: Historically, politicians could bill taxpayers for up to nine return business-class trips for partners and up to three flexible economy trips for dependents traveling to Canberra.Independent Oversight: Lawmakers' spending is audited by the Independent Parliamentary Expenses Authority (IPEA).”

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lee wrote Yesterday at 2:37pm:


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Non fixed Trusts make up over 80% of the million trusts (over 800,000 of them) testamentary trusts are about 1% of that number. The change applies to all 80% of non fixed trusts. That is 80% of $142 Billion will pay 30% minimum tax. Most of these funds do pay an amount of tax mostly by the benificiary as long as the fund itself is not in breach of several rules. The benificiary pays tax at their normal tax rate after any offsets.

If the fund pays money to people who do not qualify and a few other things like not dispersing its funds before the end of the financial year the fund is penalised at 49%.

Nobody is making a fuss about the normal family trusts which are treated identically because there is no way to pretend it relates to a death tax.

The reality here is that Tax has always applied to things like profit made on investments after the Benificiary has been allocated the assets.

i.e the benificiary's asset is making a profit on investment and they are responsible for the tax on that profit. It's simply no different to how other inheritance is treated in tax law. Nobody calls that a death tax. If you inherit a house you pay tax on its apreciation when it is sold, If you inherit money you pay tax in its future interest rates etc.