Bobby. wrote Yesterday at 9:25am:


Yes - If you are both wealthy and dead (just joking). No this is less than 1% of trusts.

How this works is if you say put $2M into this type of trust funded by a death in this case. You can distribute that money at say $18K per year tax free. Because that $18.2K it the lower limit for tax and this falls under the tax starting limit there is no tax on the person who recieves the trust. It also means that anything they earn on top is taxed straight away. What the chage does is to tax at 30% any profit made on the lump sum to be paid by the  Trustee. (only the interest is taxed).

How this works:

Example: You have 4 children peing paid by the trust and a non working wife. The trust pays them $25k each.

18,200 is the current min tax threshold. That means that each recipiant would pay about $1,088 in tax.

That is income total for all 5 people  = $125,000.00
Total tax for all 5 people = $5440.00

Not a bad deal I can see why a labor gov would want to end that and why a Lib Gov wouldn't.

Yes Bobby you can do this if you have a spare $1,500,000 dollars or so laying around doing nothing but avoiding taxes.