The Federal Government has introduced the Treasury Laws Amendment (2019 Measures No. 3) Bill 2019 (Bill), which seeks to ensure that tax concessions available to minors on income on distributions by the trustee of a testamentary trust will only apply in respect of income that is generated from assets of the deceased estate transferred to that testamentary trust (or the proceeds of the disposal or investment of those assets).

The purpose of the Bill is to address circumstances where assets (unrelated to the deceased estate) are transferred to a testamentary trust in order to benefit from concessional tax treatment of income derived from investing those assets.

The Bill is substantially similar to the exposure draft that was previously published for consultation and comment on 3 October 2019. However, the Bill has one material change from the exposure draft by removing the requirement for the Commissioner to form an opinion as to whether the (eligible) property from which the testamentary trust derives income, represents accumulation of income or capital from the (eligible) property of the deceased transferred to the testamentary trust.

The changes in the Bill were announced in the 2018 Budget and if the Bill becomes law will apply to assets transferred to a testamentary trust on or after 1 July 2019.

Henri Sheridan
Graduate Lawyer
T +61 3 9611 0194
hsheridan@sladen.com.au

Magdalena Njokos
Senior Associate
T +61 3 9611 0134
mnjokos@sladen.com.au