Testamentary Trusts are able to utilise the Special ‘Minor’ rules and as a result achieve great tax savings.

Typically a minor (child) that is someone under the age of 18 will be taxed at top marginal rates on their income including trust distributions.

However, a Testamentary Trust that makes a trust distribution to a minor is considered to have made a distribution of ‘excepted trust income’. 

Therefore the minor will have access to the $18,200 tax threshold.

The difference is shown in the table below:

                                       Testamentary Trust            Family Trust

Income / Distribution                 $18,200                       $18,200

Tax Payable                                     0                            $8,554

If you would like to discuss further please contact us:
McNamara and Co - Chartered Accountants, located minutes from the Melbourne CBD
www.mcnamaraandcompany.com.au/contact-us
Phone +61 3 9428 1062
Email admin@mcnamaraandco.com

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