Testamentary Trust and Tax implications

 Author: NikkiATO(Community Moderator)Community Moderator

20 Mar 2026

Hi @MOONDANCE,

It depends on the specific wording of the will and how the trust is structured. The tax implications will vary depending on how the will directs these assets and whether the transfer is treated as part of the estate distribution or as a subsequent disposal.

Generally, when assets pass from a deceased estate, special capital gains tax (CGT) rules apply. You should keep complete records of the shares, including their market value at the date of death, as these records will be needed for any future CGT calculations. For CGT purposes, a beneficiary is usually taken to acquire the shares at the date of death, rather than when legal title is later transferred.

A testamentary trust is established under a valid will but operates differently from the deceased estate itself. It functions similarly to a discretionary family trust, with provisions of the will operating like a trust deed. Whether your specific gift of shares can flow directly into the testamentary trust rather than to you personally will depend on the exact terms of the will, the executor’s powers, and the trust provisions.

Given the complexity of your situation, you may wish to seek specialist advice from a registered tax professional who can consider your circumstances in detail and review the will and testamentary trust terms.

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