With an ageing population and increasing wealth held
personally and via trusts and estates, the practical matters in the event of
incapacity or death have increasing importance.
Despite many holding the view that life estates should only
be used sparingly, creating life and remainder estates continues to be a
popular option for many will makers.
be used sparingly, creating life and remainder estates continues to be a
popular option for many will makers.
But after death, family members often wish to terminate
their life or remainder interests early, and there are a range of consequences
that arise from such early terminations.
their life or remainder interests early, and there are a range of consequences
that arise from such early terminations.
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| Join us on the Gold Coast, 19-20 July 2018 |
At July’s
2018 Death… and Taxes Symposium, Michael Flynn,
QC, CTA (Life) presents the session ‘Issues with life estates’. We spoke to him
about what to expect from his presentation.
QC, CTA (Life) presents the session ‘Issues with life estates’. We spoke to him
about what to expect from his presentation.
Michael told us “It is still common for will makers to leave
their surviving spouse with a life interest in the family home and in other
assets, which will pass to their children when the spouse dies. Very often this arrangement is unsuitable by
the time the will maker dies, or later becomes unsuitable, because the
surviving family members need full ownership of the family home or other estate
assets. If that happens the children and
the surviving parent can agree to cancel the life interest, but unfortunately
doing so can create a large tax liability.”
their surviving spouse with a life interest in the family home and in other
assets, which will pass to their children when the spouse dies. Very often this arrangement is unsuitable by
the time the will maker dies, or later becomes unsuitable, because the
surviving family members need full ownership of the family home or other estate
assets. If that happens the children and
the surviving parent can agree to cancel the life interest, but unfortunately
doing so can create a large tax liability.”
In his session Michael will explain the consequences of
terminating life and remainder estates prematurely and explore the options
available for minimizing the tax payable when doing so.
terminating life and remainder estates prematurely and explore the options
available for minimizing the tax payable when doing so.
Covering the treatment
of equitable life and remainder estates under TR 2006/14, he will look at the
CGT consequences of surrender of life and remainder estates, of varying life
and remainder estates, and of assigning life and remainder estates, as well as
the main residence exemption.
of equitable life and remainder estates under TR 2006/14, he will look at the
CGT consequences of surrender of life and remainder estates, of varying life
and remainder estates, and of assigning life and remainder estates, as well as
the main residence exemption.
“I’m hoping to provide some clarity around when tax
liabilities can arise, who is liable to pay it, and suggest some strategies for
avoiding or dealing with such liabilities. Practitioners who attend this
session should come away with a better understanding of how the Commissioner
applies CGT to life estates. They should
also be better equipped to advise clients making wills who propose to leave
life interests, and beneficiaries of deceased estates who wish to cancel a life
interest.”
liabilities can arise, who is liable to pay it, and suggest some strategies for
avoiding or dealing with such liabilities. Practitioners who attend this
session should come away with a better understanding of how the Commissioner
applies CGT to life estates. They should
also be better equipped to advise clients making wills who propose to leave
life interests, and beneficiaries of deceased estates who wish to cancel a life
interest.”
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| Michael Flynn QC, CTA (Life) |
Michael Flynn, QC CTA (Life), is a Barrister at Owen Dixon Chambers
West, specialising in taxation and was President of The Tax Institute in 2014.
He is the author, with Miranda Steward, of Death
and Taxes, and with James Kessler, QC, of Drafting Trusts and Will Trusts in Australia. He has appeared before
the Federal Court and the High Court in many cases on behalf of both taxpayers
and the Commissioner.
West, specialising in taxation and was President of The Tax Institute in 2014.
He is the author, with Miranda Steward, of Death
and Taxes, and with James Kessler, QC, of Drafting Trusts and Will Trusts in Australia. He has appeared before
the Federal Court and the High Court in many cases on behalf of both taxpayers
and the Commissioner.
Michael has been a member of various committees of The
Tax Institute for over 20 years, including our Victorian State Council and
National Council. He lectures in the postgraduate program at Melbourne
University and is President of the Tax Bar Association.
The 2018 Death… and Taxes Symposium also features a session looking
at tax liabilities and just who is responsible for them, presented by Lyn Freshwater
(ATO), with David W Marks QC, CTA (Queensland Bar) providing commentary.
at tax liabilities and just who is responsible for them, presented by Lyn Freshwater
(ATO), with David W Marks QC, CTA (Queensland Bar) providing commentary.
Other sessions look at common practical tax problems
advisers face in the administration of an estate, including income tax, CGT and
other relevant litigation, superannuation and death, and a keynote address from
David W Marks QC, CTA, on ethical issues facing advisers.
advisers face in the administration of an estate, including income tax, CGT and
other relevant litigation, superannuation and death, and a keynote address from
David W Marks QC, CTA, on ethical issues facing advisers.
Find out more about the program
on our website, and join us
19–20 July 2018 on the Gold Coast.
19–20 July 2018 on the Gold Coast.
