Labor rules out plans to introduce death taxes
Opposition Leader Bill Shorten has labelled suggestions by the Liberal Party that Labor plans to introduce an inheritance tax if elected as “ridiculous propaganda”.
Speaking at a press conference in Gladstone this week, Bill Shorten commented on speculation by the Liberal Party stating that Labor intended to introduce a death tax if elected.
“I want to call out the latest bit of rubbish from the government lie machine, and that is the so-called death tax. There’s actually only one leader who’s actually never ruled out a death tax, and that’s the current Prime Minister,” Mr Shorten said.
“Labor has never had any plan for a death tax under my leadership.”
Mr Shorten ruled out any plans for a death tax under Labor and labelled the speculation about the proposed tax as “ridiculous propaganda”.
Back in January this year, Treasurer Josh Frydenberg issued a statement suggesting that death taxes were a possibility under a Labor government.
“Given Labor is already proposing to tax Australians from the cradle to the grave, it is certainly not out of the question that Labor would consider taxing people beyond the grave,” Mr Frydenberg said in the press release.
Mr Frydenberg also referred to a policy document by the Australian Council of Trade Unions (ACTU) from their Congress in July last year, and suggested that Labor may “cave to its demands”.
The ACTU stated that consideration should be given to taxing the inheritances in the hands of the beneficiary.
“A lifetime threshold could be made available to the taxpayer with tax payable once cumulative inheritances exceeded the threshold,” the ACTU stated in its policy document.
Death duties were abolished in Australia in 1979. However, in the context of superannuation, the death of a member can still give rise to various taxes and duties.
Since 1 July 2017, death benefit pensions have counted towards the surviving spouse’s $1.6 million transfer balance cap.
This limit may force benefits to come out as a lump sum to the surviving spouse because the law still requires super to be paid out as soon as practicable after a person’s death. When this occurs as a lump sum and an asset such as real estate needs to be transferred out, this can trigger a CGT event for the super fund.
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.