Testamentary Trusts: Not Just “Another” Trust?

Arlene Macdonald

Taxation from ATAX, University of New South Wales

Abstract: This article examines the use of testamentary trusts and the implications of the taxation of trust rules for such trusts. It looks at the advantages and disadvantages of creating a testamentary trust in the Will as distinct from leaving property to existing inter vivos trusts and deals with the rule against the delegation of testamentary power still existing in some States. It identifies difficulties associated with planning and amending such trusts. It identifies difficulties that may result in a new trust being created and identifies Capital Gains Tax issues arising from cloning or splitting trusts. The article also considers what it terms “after death trusts” and Capital Gains Tax issues arising from those as well as Capital Gains Tax issues arising from the premature ending of life interests. The article concludes that a testamentary trust is not just another trust but is associated with many aspects peculiar to testamentary trusts that do not apply to trusts inter vivos.

Keywords: testamentary trusts; trusts; tax; trust rules; will; CGT; Capital gains tax (search for similar items in EconPapers)
Pages: 43 pages
Date: 2007-02-26
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