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.
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.