October 8, 2019

Draft legislation to close a testamentary trust loophole

Treasury has released exposure draft legislation that will close a loophole to prevent minors from receiving a tax benefit from utilising normal adult tax rates on income received from testamentary trusts where assets are injected into the deceased estate.

The new measure will clarify that minors will be taxed at adult marginal tax rates only in respect of income a testamentary trust generates from assets of the deceased estate, or the proceeds of the disposal or investment of these assets.

If passed without amendments, the change will apply from 1st July 2019. Interested stakeholders can submit their views by 30 October.

Mark Hann

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