By Amanda Tully and Jim Main -
Snapshot
- When drafting wills and advising clients on estate planning matters, practitioners should consider any potential capital gains tax implications arising from the transfer or sale of assets to a beneficiary.
- Capital gains tax exemption on death is only applicable to assets that pass under a will.
- Under the relevant tax legislation, assets do not pass to a beneficiary of a deceased taxpayer’s estate where the beneficiary becomes the owner due to a transfer under a power of sale. This also applies where the beneficiary exercises an option under the deceased’s will.
You settle on the couch with a glass of wine after a long and exhausting day. Your husband has been flat out harvesting and you did not realise just how useful he is around the house and with the kids. You are buggered. You are behind on your work as you had to leave early to pick up the kids after your babysitter bailed on you. Despite your exhaustion, you log in to try and catch up on some work. With ‘The Crown’ playing in the background, you start to wade through your emails.
You see there is an email marked urgent from one of your longstanding clients Charlie, which arrived not long after you left the office. You had prepared his mother, Lizzie’s will and subsequently acted for her estate.
Lizzie died leaving four children, Charlie, Annie, Andy and Eddy. Lizzie had wanted to treat her children as equally as possible while at the same time taking into account Annie’s desire to end up with the family beach house in Mollymook.
Annie had her share of troubles over the years and the beach house had become a sanctuary for her, especially after her separation with her husband. When making her will, Lizzie told you that Annie had always told her that one day she would like to live at the beach house, as it was a place that helped her get through some very tough times.
