Australian Government Drops 'Widow Tax' from Negative Gearing Reforms
UKPulse Money Desk
The Australian Labor government has announced it will remove the so-called "widow tax" from its upcoming tax reforms, following pressure from opposition and crossbench parties.
- The Australian Labor government will drop the "widow tax" from its next set of tax reforms.
- The change follows pressure from the opposition and crossbench.
- Beneficiaries of genuine testamentary trusts, deceased estates, and special disability trusts will be exempt from a new minimum tax on capital gains.
The Australian Labor government has confirmed it will remove the so-called "widow tax" from its next series of tax reforms. This decision comes after significant pressure from both the opposition and crossbench.
The controversial aspect of the reforms, initially announced in the May budget, would have seen widows or divorcees lose their tax concession related to negative gearing and capital gains tax discounts. This issue was highlighted in June, revealing that properties owned by a couple could lose grandfathered exemptions if transferred to a single partner due to divorce or death.
Additionally, the treasurer has exempted beneficiaries of "genuine testamentary trusts, deceased estates and special disability trusts" from the new minimum tax on capital gains. The government is now set to consult on these latest changes.
Why this matters: The reversal addresses concerns that the original reforms would have negatively impacted individuals, particularly widows and divorcees, by removing tax concessions on transferred properties.
What this means for you: If you are in Australia and were concerned about the impact of negative gearing and capital gains tax reforms on inherited or transferred property, the government has announced changes to address the so-called 'widow tax'.