Frank wrote on May 20
th, 2026 at 8:23pm:
Dnarever wrote on May 20
th, 2026 at 1:41pm:
Frank wrote on May 20
th, 2026 at 11:47am:
Dnarever wrote on May 20
th, 2026 at 10:07am:
Bobby. wrote on May 20
th, 2026 at 9:25am:
I never heard of a testamentary trust until a few days ago.
Could I have beaten the tax man?
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 = $5440.00Not 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. It is 5 different people. Why would you treat them as a single recipient when you cannot similarly pool your income while you are alive and have $18k treated as tax free for every member of your household?
Avoiding to pay tax you do not have to is common sense. Not the same as tax evasion of tax you are required by law to pay.
As Packer explained, governments are not spending our money so well that we
want to give them extra.
You do give them extra Frank - rich people not paying any tax means that you have to pay more - a lot more. Maybe I am incorrectly assuming that you do pay tax?
Yor really believe that rich people should not need to pay tax and that tax is only for the people who are poor and / or have average incomes ?
You really believe that multy million dollar funds should be able to 100% avoid tax on profit and at the same time fund disipersment from these funds should also be able to be managed to be tax free literally for decades. This example would ultimately disperse millions of dollars virtually tax free.
Wealth accumulated through legal, taxable enterprise.
Why tax it AGAIN just because you died?
Why is death now a taxable 'activity'?
99% of these trusts relate in no way to anyones death and the few that Do 1% only do so in the same way as many other taxes apply to the people who inherit the asset and have to pay forward taxation on the profit generated by what they own the same as any inheritance. If you inherit property you pay tax in the property appreciation between when you took posetion of the property and when you sell it, it works the same with investments you pay tax on the profits during the time you own the investments. This is not death tax. All it does is to make sure that very wealthy people have to pay a small and reasonable amount of tax on their investments.
Quote:Why tax it AGAIN just because you died?
The investment isn't taxed again - this is about tax on the investments interest (current Profit from the current financial year. It is not applied to current trusts only new ones and anyone with a current trust of this type has the option to easily reformat their trust.
Dear Frank here you once again continue to show that you never do any research and mostly don't know what you are talking about.
Quote:Wealth accumulated through legal, taxable enterprise.
An unfair loop hole that is justifyably being closed.
Quote:Why tax it AGAIN just because you died?
This is incorrect it isn't being taxed again - the money taxed is current profit that was never previously taxed the capital in the investment isn't taxed at all.
Quote:Why is death now a taxable 'activity'?
The tax is applied to the current living person or entity who makes the profit. It sikmply isn't a death tax in any way.
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