With Australia’s ageing population and a trend towards assets being held by older individuals, many tax practitioners today are working with ageing client bases. This means estate taxation is a hot topic and a huge opportunity for professional growth.

The increasing complexities of asset holdings and family arrangements, and the highest ever intergenerational wealth transfer presents risks and tax nuances that require a well-developed understanding of deceased estate taxation.

One practitioner who is paying close attention to this growing area of focus is Julie Van der Velde, principal of a specialised commercial law firm, VdV Legal. Julie has been a member of The Tax Institute since 2002 and told us she particularly values the opportunities membership provides to meet and exchange ideas with so many outstanding professionals.

“One of the highlights of my career was to be awarded the SME Tax Advisor of the Year in 2017, a huge honour and a wonderful affirmation that as a sole practitioner I can still be part of the wider tax community,” she added.

And we are thrilled to have someone of Julie’s technical excellence as part of our organisation. This year, Julie is lending her expertise to the 2021 Death… & Taxes Conference, the leading event for estate taxation.

We caught up with Julie ahead of the conference to hear more about her session, Rising dead and buried issues: 100A and 99B. In this session, Julie will explore the ATO’s new and unforeseen applications of old legislation, which has created a need for legal personal representatives and the trustees of testamentary trusts to understand the risks imposed on them by the rise of these provisions.

So, Julie, can you tell us a bit about the topic you’ll be exploring at the 2021 Death… & Taxes Conference?

The topic I will be discussing is the rise of dead and buried issues; legislation introduced in the 1970’s but recently given a whole new lease of life and rising to prominence in new interpretations the Commissioner has started to apply.

I used the section numbers I will be taking about in the title of my topic, not because I don’t know it is outdated to refer to a topic by section numbers, but because the titles given to these two sections are so misleading that only the section numbers seemed possible. Section 100A is referred to in the Act as dealing with ‘reimbursement agreements’. As the section can apply where there is no reimbursement and no agreement it’s not a helpful title.

Similarly section 99B is referred to as ‘receipt of trust income not previously subject to tax’. The section can result in amount being taxable in cases where no ‘income’ is received so this heading too is apt to mislead the unwary.

What piqued your interest in this re-emerging legislation?

Having specialised in trust law and the taxation of trusts for many years and the unexpected change in the Commissioner’s interpretations of these sections, together with the potentially devastating consequences for the unwary taxpayer make this a really important current topic for anyone in Australia dealing with a trust or an estate, wherever that trust or estate may be.

This topic is particularly relevant just now as the Commissioner has indicated that the long awaited ruling setting out his views on section 100A is about to be published. Equally, he has recently started applying section 99B in a far broader manner than ever before.

So this is an area for growing interest and opportunity. What’s the real-life impact for tax professionals?

The biggest impact of this topic is on those who are not aware of how extensively the Commissioner has re-interpreted each of these sections and the breadth of application they may have in their new incarnations. The risk of a taxpayer being subject to tax on an amount he or she had no expectation would be taxable is very real. Equally, there is a real risk to advisors unless they are keeping up to date with the Commissioner’s reinterpretation of existing legislation in completely new ways.

One of the most concerning aspects of these two sections is that there is so little case law, and most particularly so little recent case law. The Commissioner has put forward his new interpretations of the sections and subject to judicial consideration many taxpayers will simply find themselves faced with a tax bill they must pay or be forced to commence a dispute.

A really important topic to cover and sure to be a great session. Are there any other sessions you’re particularly looking forward to at the Death… & Taxes Conference this year?

I am looking forward to the whole event but perhaps most particularly to hearing Brian Mitchell explore jurisdictional issues and estates with foreign elements as these issues become more and more prominent in our multicultural society.

You can catch Julie at the 2021 Death… & Taxes Conference, held 19-21 August 2021 at the Hilton Brisbane. Find out more about the event.

About Julie Van der Velde

Julie Van der Velde, CTA, is the principal of a specialised commercial law firm, VdV Legal, and has degrees in Business and in Law and a Masters of Taxation Law. With over 20 years’ experience advising Australian businesses, her practice focuses on taxation and trust law with an emphasis on business structuring, tax planning, business succession and intergenerational transfers. Julie is The Tax Institute’s SME Chartered Tax Adviser for 2017 and is regularly listed as a recommended tax lawyer and a recommended Wills, Estates and Succession Planning lawyer in Doyle’s Guide.