Call for reform on family asset transfers
Accounting firm HLB Mann Judd has recommended the Federal Government examine the current taxes levied on the transfer of assets between generations as part of its impending taxation review to allow for easier retirement planning.
“With longer life expectancies, these days people are transferring assets under their will to their children when they are in retirement themselves,” HLB Mann Judd Sydney managing partner and tax adviser Tony Fittler said.
At the moment families who initiate intergenerational asset transfers are liable to pay stamp duty and capital gains tax (CGT) on the transactions unless they qualify for concessions under the small business CGT rules.
Often the situation means families will have to make a choice to either sell off other assets to fund their CGT obligations, or defer the transfer until the parents pass away, a situation where CGT and stamp duty no longer apply.
“If the Federal Government changed the CGT rules, so that they were the same for intergenerational transfers as they are on death, it would enable parents to help their children financially at a time when they really need it,” Fittler said.
However, Fittler explained he is not advocating for CGT and stamp duty on family assets to be scrapped altogether, but rather levied only when the items in question were sold to an external third party.
“If intergenerational transfers qualified for the same relief that apply to asset transfers on death, the children could defer CGT until assets were sold to a third party,” he said.
“So our suggested reform will not reduce the tax paid either in CGT or stamp duty, but simply postpone it until an asset is sold outside the family,” Fittler added.
Recommended for you
Digital advice tools are on the rise, but licensees will need to ensure they still meet adviser obligations or potentially risk a class action if clients lose money from a rogue algorithm.
Shaw and Partners has merged with Sydney wealth manager Kennedy Partners Wealth, while Ord Minnett has hired a private wealth adviser from Morgan Stanley.
Australian investors are more confident than their APAC peers in reaching their financial goals and are targeting annual gains of more than 10 per cent, according to Fidelity International.
Zenith Investment Partners has lost its head of portfolio solutions Steven Tang after 17 years with the firm, the latest in a series of senior exits from the research house.
