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Joseph M.
Joseph M.
Abbotsford, NSW
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My family just inherited a large sum of money and i know we don't pay tax in the inheritance but if we invest in managed funds do we pay tax on the returns we get?

last month

Responses

Hi Joseph,
Tax will be payable on all earnings. I would suggest you all speak to an accountant about how to structure the holding of the money and perhaps a financial planner to work on how best to invest the money if you aren’t going to split up the funds
Best of luck with it
Regards
Scott

Hi Joseph,

You’ll want to be careful re. tax on the inheritance. There are some circumstances where tax will be payable eg. very likely if the money has come from superannuation in the name of the deceased.

So firstly need to work out if there actually is or isn’t tax payable.

Then you’ll need to work through how can they money best be used to support you and your family. Repayment of debts or investing to provide an income as some examples.

Once one & two above have been addressed then you can work through how best to ‘hold’ the rest so as to limit tax liability on any income the lump sum earns. Trust structures could be helpful here.

That then rounds you back to the beginning were the deceased may have had provions in their will that you could have elected to receive the inheritance via a trust in the first place (known as a testamentary trust) - which can be very beneficial.

You need to see professional advice here, lawyer, accountant & financial adviser together. A few dollars in professional fees could save you theoghsands on an ongoing basis.

Please reach out if you need any further help from me.

All the best.
James

james.wrigley@firstfinancial.com.au

Hi Joseph,
a "large sum of money" can bring with it some large tax headaches!!! It is very important that you spend some time in figuring out exactly what you are receiving (eg death benefit lump sum from a super fund has different tax consequences than the cash left in Aunty Ethyls sock drawer)
then you need to decide what to do with it.
get in front of a good bean counter and a good planner to figure out what is what and what you need to do. If you are not the executor of the estate then I suggest you talk to the executor about what you have received and what tax implications there might be.....

cheers

BC

last month

You pay some form of tax along the way check with the right people they should know.

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