ATO rules on liability after death
The Australian Taxation Office (ATO) has ruled that partners and adult children can face substantial tax liabilities after the death of a parent or partner.
In a move that will render much pre-existing estate planning arrangements null, the ATO has determined that capital gains tax applies to substantial inheritance as well as the 16.5 per cent death benefits tax.
The ruling has drawn criticism from financial groups who argue that individuals could be liable for hundreds of thousands of dollars in the event of the death of a parent or spouse.
The ATO has opened the ruling to industry comment, but it is widely accepted that as the ATO has been considering the move for over two years that it will unlikely reverse its ruling.