Trust/Super Deeds
TRUSTS
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Our associates are Australia's leading provider of Trusts for ownership of property. We offer many specialised versions
Most of our associate's unit trusts are available with THREE VERSIONS - Trustee Discretion, Absolute Entitlement and % Consent (Up to 100%) dealing with redemption rights as well as ability to issue further units, vest and change the terms of the trust. These terms are critical whenever a SMSF investment is being considered as well as many others instances such as unrelated or distantly related investors.
TIP : NEVER buy more than one property in a trust. Unintended CGT, Land Tax (some states) and stamp duty issues occur. Multiple trusts can share the same Trustee.
TIP : First Home Buyers - Buying an investment property before a first home??? Beware - You may lose first home buyer benefits. Our associates can suggest a strategy to safeguard this. Call us for assistance. |
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NSW Land Tax Unit Trust
In 2007 the NSW OSR appeared to signal an end to the use of a unit trust to own property. Not true. Advisers have been recommending investors buy property in their own names. This loses valuable concessions like refinancing to repay non-deductible debt, allowing a SMSF to buy some or all of the units later, the ability to "change ownership" without stamp duty ($2m limit). The NSW LTUT allows one, two or even three land tax thresholds for unitholders. Our associates offer the LTUT with an OSR Ruling. This trust is a MUST for any mum and dad investor who has a personal land tax threshold to keep that benefit and add the benefits a unit trust offers. There is no better structure available for NSW property investors. Save up to $6,000 pa in land tax. |
Hybrid Unit Trust
A hybrid unit trust has all the features of a unit trust, but also vests the Trustee with the ability to issue 'special units'. The rights as to income and/or capital of the Trust Fund attaching to the special units is determined by the Trustee in its absolute discretion, and are described in the Certificate of Units. The usual obligation of the Trustee of a unit trust to distribute the income or capital of the trust in proportion to the number of units held by the Unitholders may be altered in a hybrid unit trust, where there are special units on issue, such that the holders of such units may be entitled to receive preferential distributions of income and/or capital. Special Units may be issued so that the a unitholder can lend funds at an agreed rate and avoid a loan agreement
Discretionary Trust
This type of trust is established with the payment of a Settlement Sum to the Trustee, to be held for the benefit of the Beneficiaries. The Appointor may remove or replace the Trustee. On the Vesting Day, the Beneficiaries are entitled to the whole of the Trust Fund. Until that day, distributions of income or capital are made at the discretion of the Trustee, in accordance with the Deed of Settlement, ie. the Trustee may distribute all of the net trust income to one Beneficiary to the exclusion of others, equally amongst the Beneficiaries or disproportionately amongst the Beneficiaries. Our associates offer Discretionary Trusts with or without a "Controller" who provides an additional form of protection beyond the appointor. The Controller must give a trustee consent to alter the trust, add beneficiaries and vest.
Hybrid Discretionary Trust
A hybrid discretionary trust has all the features of a discretionary trust, but also vests the Trustee with the ability to issue 'special units'. The rights as to income and/or capital of the Trust Fund attaching to the special units is determined by the Trustee in its absolute discretion, and are described in the Certificate of Units. Several options are available but 'market value' is generally used for redemption. The usual ability of the Trustee of a discretionary trust to distribute the capital and net income of the trust at his sole discretion may be limited in a hybrid discretionary trust, where there are special units on issue, such that the holders of such units may be entitled to receive preferential distributions of income and/or capital. MGS offers Discretionary Trusts with or without a "Controller" who provides an additional form of protection beyond the appointor. The Controller must give a trustee consent to alter the trust, add beneficiaries and vest.
Our associates Discretionary Trusts allow income and capital to be separately determined and allow streaming, amounts set aside on sub-trust and comply with the Forrest and Bamford decisions.
Capital Vested Trust
This type of trust is established with the payment of a Settlement Sum to the Trustee, to be held for the benefit of the Beneficiaries. The Appointor may remove or replace the Trustee. On the Vesting Day, only the Capital Vested Beneficiaries are entitled to the whole of the Trust Fund. Until that day, distributions of capital (but only to the Capital Vested Beneficiaries) or income are made at the discretion of the Trustee, in accordance with the Deed of Settlement, ie. the Trustee may distribute all of the net trust income to one Beneficiary to the exclusion of others, equally amongst the Beneficiaries or disproportionately amongst the Beneficiaries.
Testamentary Trust
This type of trust is established by the Will of a person. Upon their passing, the Will instructs the Executor of the Deceased's Estate to create a testamentary trust, which is a hybrid. The Will includes Guardianship, Power of Attorney, Deed of Mutual Wills and contains extensive options for multiple Trustees, Beneficiaries, Bloodline rights, Funeral instructions, Organ Donation, gifts and much more. Written by one of Australia's leading estate planning law specialists. As each circumstance is very likely to necessitate a different approach, please contact us for further details and a detailed instruction document.
COMPLIMENTARY SERVICE
We can review your deed for FREE and ensure you comply with tax law.
For further information please contact Norbert Cornell -
Ph - 02 99568008
Mob - 0437381288
Email - norbert @accountants.com.au
Website - www.accountants.com.au
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HYBRID TRUSTS
The Commissioner of Taxation has issued Taxpayers Alert TA 2008/3, to voice a number of concerns he has in relation to certain features of some Hybrid Discretionary Trusts. The particular features which the ATO appears to have the most difficulty include:
 an ability to defeat a unitholder's entitlement to receive distributions of fixed proportions of trust income and capital gains;
a unitholder not being entitled to receive distributions of trust capital gains at all;
interests or entitlements being conferred upon associates of a unitholder for less-than-market-value consideration;
a unitholders entitlement to receive distributions of the trust ordinary income being less than what it should be, meaning that they've borrowed to fund income to which other beneficiaries are entitled;
a unitholder only being entitled to receive distributions of the trust capital gains;
a unitholder's interest in the trust ending before the cost of their investment has been recouped;
a unitholder redeeming their units at their purchase price or less than market-value; and
units being purchased at an amount less than their market-value.
Our associates provide a Deed which we recommend because they -
1. have been in communication with the ATO for years concerning hybrid trusts,
2. have been working with the ATO to work out an acceptable form of deed that would entitle the Special Income Unitholders to a full deduction,
3. are the only deed provider to have a deed which has been the subject of a favourable ruling,
4. know what the ATO will allow and how to amend deeds without causing a resettlement,
they know what issues concern the ATO that aren't in the amendment
I have a hybrid discretionary trust which I want reviewed - What should I do?
The hybrid discretionary trust you have established should be checked by our associates and if necessary amended to bring it in line with what is acceptable to the ATO. The trust deed, application for units and unit certificates should be reviewed and where necessary amended.
These documents have all been approved by Senior Tax Counsel
For further information please contact Norbert Cornell -
Ph - 02 99568008
Mob - 0437381288
Email - norbert @accountants.com.au
Website - www.accountants.com.au
SUPERANNUATION FUNDS
DIY SUPER FUND
Our deed contains all the essential requirements and leaves out the pages that others use to fill the binder. This avoids repetition and the need for repeated updates. It also means our deed is easy to read.
Just 15 pages and doesn't mention old taxable pensions, employers-sponsors and repeat law that shouldn't be in any deed. Best of all it comes complete with:
Investment Strategies Kit - 5 customisable documents required by s52(f)
SMSF Wills - Two non-lapsing SMSF Wills that mean death benefits go where it makes sense.
Transition To Retirement Kit - Guide, Checklist, PDS and all supporting documentation
Account Based Pension Kit
Pension Rollback Kit - Turn "Off" your pension, add pensions and simplify administration
Reserving Kit
UPDATE YOUR SUPER DEED
Many deeds in the market just don't cut it. Our associates reviewed a number of Deeds common to SMSF's and found that a large number of SMSF's are out of date, contain old law and fail to satisfy basic requirements that should be in the Governing Rules. Our associates have developed the industry solution to fix out of date and poor quality SMSF deeds
If your fund does not comply with the law the ATO has the power to tax all the assets of your fund at the top marginal rate!
PLEASE CALL US FOR A FREE REVIEW OF YOUR DEED
For further information please contact Norbert Cornell -
Ph - 02 99568008
Mob - 0437381288
Email - norbert @accountants.com.au
Website - www.accountants.com.au
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