Hello,
I have looked for an answer to this question-
1) From multiple accountants
2) From the ATO Help Desk
3) Searching the ATO web site
4) This forum
I understand the angle that other people have asked this question. As I am looking after other beneficiaries, they look to me for a proactive answer so they can estimate the additional tax payable, rather than a reactive answer and a unpleasant surprise once the ITRs have been submitted.
I usually find that for questions like these the accountant follows up with the ATO, and the response can take months.
Is there a worked ATO document that shows how we might pursue this?
I have a Trust created from my Mother’s estate where multiple entities have purchased allotments of shares over the years.
Examples of entities(All are deceased and the SMSF has been wound down)
1) Mother
2) Father
3) SMSF
All Share installments were Off Market Transferred from-
My Father to my Mother,
From the SMSF to my Mother
And then
Off Market Transferred from the Mother’s estate to a Trust.
Both beneficiaries of this Trust are entitled to pay tax from the Capital Gain of the Shares.
As an example the Trust looks like the following-
Trust allotments
Share Date of Purchase Number purchased Who Purchased
BHP 1/1/2010 100 Mother
BHP 1/1/2011 200 Father
BHP 1/1/2012 300 SMSF of Mother and Father
We are proposing to OffMarket transfer from the Trust to the 2 beneficiaries as follows-
Beneficiary A
Share Date of Purchase Number purchased Who Purchased
BHP 1/1/2010 50 Mother
BHP 1/1/2011 100 Father
BHP 1/1/2012 150 SMSF of Mother and Father
Beneficiary B
Share Date of Purchase Number purchased Who Purchased
BHP 1/1/2010 50 Mother
BHP 1/1/2011 100 Father
BHP 1/1/2012 150 SMSF of Mother and Father
In my example, if there was 1 beneficiary, there could be a series of FIFO LILO sales of BHP, and Capital Gains would be taxed at each Financial Year.
However, with 2 beneficiaries, the beneficiaries will likely sell down their share allotments at different Financial Years convenient to their life journey, which is likely to violate the FIFO LILO selldown strategy.
How is this accommodated?
Regards,
LifeQuest
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