2009 Budget – Taxation of Special Disability Trusts

Written on 18th May, 2009

Taxation of Special Disability Trusts

To help support people with severe disabilities as well as their immediate family and carers, the Government has announced a number of changes to the taxation of Special Disability Trusts. These include:

• From 2008-2009, the Government will ensure that any unexpended income of a Special Disability Trust will be taxed at the beneficiary’s personal income tax rates rather than at the top marginal rate.
• With effect from 2009-2010, the Government will extend the capital gains tax main residence exemption to include a main residence owned by a Special Disability Trust and used by the relevant beneficiary as their main residence.

Oculus comment

These concessions will reduce the potential tax liability on any unexpended income derived by a Special Disability Trust as well as allow a property to be owned by the trust without tax penalty where the relevant beneficiary uses the property as their main residence.