Being involved in aged care as part of our lifetime financial & tax strategies we see things differently.
We recommend tax advice BEFORE DEATH where there are significant assets esp non-property.
- Utilise Cfwd CGT losses (that terminate on death).
- Identify CGT assets...Costs base records etc. Just had a client with huge antique collection and few records. Used in a business. A potential nightmare restructured now to avert problems.
- CGT strategies
- Super death benefits strategies and planning incl re-contributions, pensions etc.
The question is "When"....
* Age 56-60 is a good initial point depending on health, work etc. Time to plan longer / medium term strategies that involve large contributions before work tests and age limits start to apply.
* Terminal illness, poor health / dementia etc. Act as early as possible to review update and change strategy as required.
Good legal advice at same time and estate planning services important at this point. Ideally acting together.
Planning should also consider proposed or potential future age care. Nobody wants it but planning should still occur. Gifting early, what assets dont count as assets, personal circumstances eg a carer. DONT SELL THE PENSIONERS HOME without advice. Exempt asset for Centrelink until its sold then $$ counts for income AND assets tests AND affect value of accom bond.
Then its essential that the executors seek tax advice promptly AFTER death. Assets can flow through to beneficiaries without triggering CGT (they acquire the cost base or market value). However its often beneficial to sell assets and distribute cash in some cases (ie a large lumpy asset nobody wants). While you can defer CGT by distribution assets it doesnt end CGT. So beneficiary needs should also be considered if possible to seek lowest tax outcome possible.
Strategies:
* Sell some/all, distribute some / all ? Identify a strategy that may offset gains v's losses especially if a beneficiary has Cfwd losses.
* CGT timing strategies. Consider sale of assets over time in estate to use tax free limits or to fit with beneficiary strategies. Many think a fast administration is better. Not always.
* Consider assets to be held. Refreshed cost base ?
* Consider beneficiary super strategy. in-specie distribution to their fund may be a strategy. CGT triggers etc need to be considered.