I have no dependants and have made my nephew and a couple of friends beneficiaries of my will. I was wondering whether they will be taxed on the money and, if so, if there is a way to minimise this?

Your house would be an exempt asset, and there would be no tax effect on any cash left to the beneficiaries. The taxable component of superannuation left to a non-dependent will be subject to the 17 per cent death tax.

You can reduce the taxable component by adopting a withdrawal and contribution strategy, but the simplest method is for you, or your attorney, to withdraw all your superannuation tax-free before death and either place in your bank account, or else give it to your beneficiaries. Doing it this way you will to be present when they receive the money and hopefully share the joy it will bring.

I recently read an answer to a question posed on capital gains tax (CGT) and its effect on pension income test, and was surprised to read that the answer that there is none. I am 60, still working, and have two investment properties. I glean from your answer to the above question that I could retire, sell the two investment properties, pay no CGT, use the bring-forward rule to put all the proceeds into super, and then recommence full-time work with no penalties, is this correct?

It’s not quite that simple. The Centrelink rules and the tax rules are quite different. As I wrote recently, a CGT event is not regarded as income for the Centrelink income test, but it will certainly be taxable as far as the Australian Tax Office is concerned.

Noel Whittaker is the author of Wills, Death & Taxes Made Simple and numerous other books on personal finance. Email: [email protected]

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

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