On 1 September 2015, the Powers of Attorney Act 2014 (The Act) introduced new civil and criminal penalties for misuse of an enduring power of attorney. The new penalties include a fine of up to $91,000 or up to five years imprisonment.

The very public dispute between mining magnate Gina Rinehart and her children over access to family wealth held in a Family Trust came to a head this year, when the NSW Supreme Court appointed one of Gina’s 4 children (Bianca) as the new trustee of the Family Trust in place of Gina. 

The Family Trust, in effect, owned a 24% shareholding in Hancock Prospecting Pty Ltd (HPPL) and HHPL owned all the shares in the company which has an interest in an iron ore mine at Hope Downs.  Bianca and her brother, John, had issued court proceedings against their mother to remove her as trustee so they could access their share of the Trust’s assets. 

New powers of attorneys will come into effect in Victoria from 1 September 2015.

The New South Wales Court of Appeal adopted a traditional and technical approach to the interpretation of the terms of a trust deed when dismissing an appeal in the decision in Segelov v Ernst & Young Services Pty Ltd.

The attached presentation was delivered by Sladen Legal’s Rob Jeremiah and Phil Broderick at the Tax Institute’s Trusts & Estates Club on 17 June, 2015.

In this presentation, Rob discussed “Beneficial interests” in and “beneficial ownership” of trust property – trustees, trusts and beneficiaries, while Phil addressed issues about Superannuation and insurance – the good, the bad and the ugly.

The Australian Tax Office (ATO) has issued ATO Interpretative Decision (ATO ID) 2015/8 providing further guidance to trustees of unit trusts seeking to satisfy the basic conditions for access to the capital gains tax (CGT) small business concessions.

The ATO ID states where the trustee of a unit trust has the power to accumulate income, that does not of itself cause the unit trust to fail the fixed trust tests relevant for the purposes of calculating an entity’s small business participation percentage in the trust (item 2 of the table in subsection 152-70(1) of the ITAA 1997).

The Queensland Supreme Court decision of Munro v Munro has found that a binding nomination signed by a member of an SMSF was invalid because it did not strictly comply with all of the provisions of the fund deed and that near enough is not good enough. 

Capital Gains Tax (CGT) event E4 will arise when a beneficiary receives a payment from a trustee of a trust in respect of the beneficiary’s unit or interest in that trust and either some, or all, of that payment is not included in the taxpayer’s assessable income.

An Australian Taxation Office (ATO) private binding ruling, and minutes from the National Tax Liaison Group, suggest that CGT event E4 will not arise when the payment of a non-assessable amount is made to an owner of discretionary units.

To what extent do directors of a corporate trustee owe duties to a corporate trustee, its shareholders and/or the beneficiaries of the trust?

This article examines a Federal Court case in which a director of a private company, acting as trustee of a private trust, was found to have breached his fiduciary duties to the company by entering into a series of transactions to effect superannuation contributions.