Hi,
This is a random question as I overheard a conversation at the weekend! The gist of the conversation is this;
1. Take a family, two parents and two children
2. Parents pay into a fund (best description I have)
3. When they die, this fund can be used to pay the property capital gains tax on the property being passed to the children
4. The assumpation is, the property(s) are more than the inheritance threshold
5. The childrens tax inheritance threshold amount is not impacted upon by the capital acquisitions tax (CAT) being paid when using this fund
6. The remaining amount, if any, from this fund, is then passed to the children, more than likely incur CAT.
There are many gaps in this conversation but essentially its how the fund can pay the CAT when the property is being passed to the children upon the death of the parents without impacting on the tax inheritance threshold of the children.
This was a conversation between two men in a pub! Soo you'll apreciate the context and the gaps in the conversation! But sounded really interesting...
Thanks.
Yupya Boyo