The loss of a spouse now means paying tax at a much higher rate

The loss of a spouse now means paying tax at a much higher rate

Case Study #1

Recently a client of ours lost their beloved spouse of many, many years. All their assets and investments were in joint names. This resulted in a doubling of the income from a now double value of investments. Survivorship of joint assets means all the assets and investments go into the name of the surviving spouse as at the date of death. It is now anticipated that upon the preparation and calculation of the 2024 tax return it is expected the tax rate and the amount of tax will now increase for the surviving spouse. In addition, this situation involves a Federal Government pension to the surviving spouse which is not tax free but taxable with a 10% tax rebate unique to Federal Government pensions. All this increased total income results in a higher income tax at a much higher tax rate!

BUT there are options to reduce tax with strategic planning.

Come see us.

Case Study #2

A surviving spouse has not had to prepare an income tax return for several years. The recent loss of a partner has meant the preparation of a tax return for the first time in years due to an inherited income from the deceased spouse.

It is relevant here to remember just because a person did not need to do a tax return, this situation may not always continue. Inheritance, sale of a home and investment of part of these funds, a return to work, increased work, and increased pay can flip things around leaving a person ‘shell shocked’. Dealing with the tax return issues after a break of many years would take some getting used to. The income situation, ownership structure of the investments and Estate matters can offer advantages and time, so…. seek advice BEFORE doing anything.