The new superannuation laws have recently been passed by the federal government.1 The new laws include the introduction of the transfer balance cap (TBC). The TBC limits the amount a member can transfer into a pension account in a super fund. The initial cap will be $1.6m.
During a panel discussion at The Tax Institute‘s National Convention in March 2016, Second Commissioner Andrew Mills mentioned that the ATO was considering publishing guidance regarding the manner in which the Commissioner would exercise his discretion to treat beneficiaries as having fixed entitlements in trusts for the purpose of s 272-5(3) of Sch 2F to the Income Tax Assessment Act 1936 (Cth) (ITAA36).
There are a number of reasons why the trust instrument of a discretionary trust might need to be amended. These include, but are not limited to, succession planning, tax planning and/or the general modernisation of the provisions of a trust deed to account for changes in trust and tax laws.
All references in this paper are to the Superannuation Industry (Supervision) Act 1993 (SIS Act), the Superannuation Industry (Supervision) Regulations 1994 (SIS Regs) and the Income Tax Assessment Act 1997 (ITAA97) and the Income Tax Assessment Act 1936 (ITAA36) unless otherwise stated.
Striking a balance between providing for a spouse and children from a previous relationship is a challenge many of us as professional advisers have encountered. As advisers, careful advice needs to be given to clients outlining their obligations, risks and the consequences of their instructions and intentions. Blended families are more prone to dispute than is the case with first relationships and face a range of challenges, practically and legally. Superannuation, estate planning and family law disputes can often be avoided with proper planning and strategic decision making.
From 1 July 2015, if the trustee of a foreign trust acquires Victorian residential property, that trustee is liable for a duty surcharge of 3%1 on top of the normal ad valorem duty. This can result in a duty rate of up to 8.5%. This article will examine when a trust will be a foreign trust and what changes can be made to trusts to ensure that they are not foreign trusts under the Duties Act 2000 (Vic).
Until recently, unpaid present entitlements (UPEs) have been a rarely considered aspect of trusts, especially in relation to tax considerations post their creation. However, in the last few years, the position of the Australian Taxation Office (ATO) on the application of Div 7A of the Income Tax Assessment Act 1936 (Cth) (ITAA36) to UPEs to corporate beneficiaries1 has brought UPEs into focus. In more recent times, the ATO has released draft determinations, a determination and a ruling on the interaction of UPEs with a number of tax provisions, including the bad debt rules and the small business tax concessions.2
There are significant tax issues, especially in relation to possible capital gains tax (CGT) liabilities, which should be considered whenever a client intends to restructure a trust. This is particularly the case in the restructuring of entities, particularly trusts, in a family group
When most people think of self managed superannuation funds (SMSFs) they mostly think of a vehicle to provide retirement benefits and their concessional tax treatment. In contrast, the asset protection benefit provided by SMSFs is often not considered.
This paper examines how to incorporate super into the succession process. In particular, the use of BDBNs and reversionary pensions and the interaction between the two and the succession of the super fund trustee is examined.
This is the first of a two-part series discussing the proposed treatment of unpaid present entitlements (UPEs) by the Australian Taxation Office (ATO). On 10 June 2015, the ATO released TD 2015/D5 and TD 2015/D4 discussing, respectively, the treatment of UPEs for the purposes of:
Real property is a popular investment for SMSFs (self managed superannuation funds). However, there are a number of unique issues that come with SMSFs receiving, holding and disposing of real estate. In this paper I have examined a number of those issues in great detail.
On 19 February 2015, the ATO issued PS LA 2015/2. An early candidate in the ATO’s ongoing campaign to redesign (and rewrite) law administration practice statements (LAPS),1 PS LA 2015/2 seeks to explain
The decision of the Victorian Court of Appeal in Australasian Annuities Pty Ltd (in liq) v Rowley Super Fund Pty Ltd 1 (Rowley Super) concerns the ability of a liquidator to claw back contributions made to a superannuation fund where such contributions are made as a result of a director breaching his fiduciary duties to the corporate trustee of a discretionary trust.
In the first part of this article, I examined whether a self-managed superannuation fund (SMSF)1 can carry on property development activities and a property development business, and what superannuation and tax laws must be considered when an SMSF carries on property development activities. In the second part of this article, I examine various structures under which an SMSF can undertake property development, or invest in an entity which undertakes property development activities. Legislative references are to the Superannuation Industry (Supervision) Act 1993 (SISA) or the Superannuation Industry (Supervision) Regulations 1994 (SISR).
Self-managed superannuation funds1 (SMSFs) have been carrying on property development activities ever since they came into existence. Such activities are either done directly by the SMSF or more commonly through a structure (typically, a trust). Yet, despite this, there is still a common concern that such activities will cause the SMSF to become non-complying, or subject to penalties, on the basis that such activities, and in particular undertaking a property development business, are prohibited
This article discusses some of the taxation and trusts issues encountered when structuring family law settlements. Managing these issues appropriately through careful planning and the preparation of appropriate documentation can ensure the best financial and taxation outcome for clients
This article discusses the complexity associated with a trust satisfying the maximum net asset value test for the purposes of accessing the capital gains tax (CGT) small business concessions where it is unclear whether an unpaid present entitlement (UPE) would be classified as a liability relating to the CGT assets of the trust.