News

COVID 19 and trust liquidity issues

COVID-19 and trust liquidity issues

September 1, 2020

The ATO has highlighted the fact that due to COVID-19, a trustee may experience liquidity issues that may affect a trust’s ability to satisfy a beneficiary’s entitlement. This may happen where financial institutions impose restrictions that affect the way a trustee can deal with its assets. The ATO states that where a present entitlement arose…

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Distributions from a discretionary trust

Distributions from a discretionary trust

February 4, 2020

Photo by Wesley Tingey on Unsplash Distributions from trusts and the taxation of those distributions can be complex. This is an attempt to simplify the topic. The purpose of a trust is to separate the legal and beneficial ownership of assets. The legal ownership of the asset rests with the trustee. The beneficiaries benefit from…

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What you need to know about trust distribution resolutions

What you need to know about trust distribution resolutions

August 7, 2019

An essential starting point for consideration of trust income and how that income is to be distributed is to look at the trust deed. This very central document sets out the rules and expectations for the governance and operation of the trust and the powers that can be exercised by the trustee. Although it can…

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ATO actions on trusts and tax avoidance

ATO actions on trusts and tax avoidance

June 7, 2019

The ATO says that it recognises that most trusts are used appropriately and for legitimate purposes. It says it will continue to help those who make genuine mistakes or are uncertain about how the law applies to their circumstances. The ATO has a number of “trust risk rules” in place to identify higher risk compliance…

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Look before you leap with testamentary trusts

Look before you leap with testamentary trusts

May 4, 2018

A testamentary trust works in tandem with a will, and is similar to a discretionary trust, with the major difference being it only takes effect upon the death of the person who made the will. The trust can be funded by some or by all of your assets, and by payments derived as a consequence…

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Streaming trust capital gains and franked distributions: An overview

Streaming trust capital gains and franked distributions: An overview

July 4, 2017

The ATO has stated that a trust’s capital gains and franked distributions can, if not prevented by the trust deed, be streamed to beneficiaries for tax purposes by making these beneficiaries “specifically entitled” (more below) to the amounts. This allows beneficiaries to offset capital gains with their capital losses, apply applicable discounts and, subject to…

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The process (and pros and cons) of “electing” to be a family trust

The process (and pros and cons) of “electing” to be a family trust

February 3, 2017

Trusts are an important and very useful concept for managing one’s financial affairs, as well as estate planning. Atrust is established whenever there is a separation of the legal ownership (for example, the name appearing on a land title) from the beneficial (equitable) owner of an asset (in other words, the person that a court…

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Trust essentials

Trust essentials

June 2, 2016

Trust structures and their use can often be misunderstood – we demystify some of the jargon. WHY USE A TRUST? Trusts are commonly used to protect assets, as property and other assets that are held by a trust have a level of protection from creditors. A trust can also maintain an estate until a beneficiary…

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Trusts 101: What are they, and how do they work?

November 8, 2013

One of the big motivations for considering using a trust will be to protect assets. Property and other assets can be moved into a trust for protection from creditors, to maintain an estate until a beneficiary becomes old enough to have legal possession, or isolate valuable assets from a trading company that may be more…

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Trusts: Their use and their structure

February 12, 2013

A major motivation for the setting up of trusts is asset protection. Valuable property and other assets can be moved into a trust to isolate them from being exposed to litigation, for example, for protection from creditors, or to maintain an estate until a beneficiary becomes old enough to have legal possession. The use of…

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