This is a copy of my “SMSF and other Trusts” seminar that I presented to the Australian Institute of Conveyancers’ members 3 times this year; being at Perth, Bunbury and mostly recently in Geraldton. Appreciably these slides only cover some of the trusts and compliance issues that we discussed in detail during these seminars and that pertain to Conveyancers/ affect settlement transactions. The key are covered are: Self-Managed Superannuation Funds, Limited Recourse Borrowing, Bare and Custodian trusts, Family Trusts’ real property transfers into SMSFs and vestings, Special Disability Trusts plus a myriad of other practical and commercial issues.
Special Disability TrustsEstablished by parents and immediate family members to plan for the future care and accommodation needs of a person with a severe disability.Special Disability TrustsThe benefits of a Special Disability Trust are:that a gifting concession of up to $500,000 combined is available for eligible family members of the principal beneficiary andthat an assets test assessment exemption of up to $596,500 (indexed each year) is available to the principal beneficiaryTo be eligible to be a principal beneficiary, the disabled person must meet the definition of severe disability
Special Disability TrustsEstablished by parents and immediate family members to plan for the future care and accommodation needs of a person with a severe disability.Special Disability TrustsThe benefits of a Special Disability Trust are:that a gifting concession of up to $500,000 combined is available for eligible family members of the principal beneficiary andthat an assets test assessment exemption of up to $596,500 (indexed each year) is available to the principal beneficiaryTo be eligible to be a principal beneficiary, the disabled person must meet the definition of severe disability
Property meansUnit 44, 33 Bronte Street East Perth Western Australia 6004 to be known as Lot 44 on Strata Plan 60018 and currently being part of Lot 500 on Deposited Plan 56653 being the land comprised in Certficate of Title Volume 2721 Folio 644 and shown for identification purposes only hatched on the plan attached, marked A.See TFH 10981
Special Disability TrustsEstablished by parents and immediate family members to plan for the future care and accommodation needs of a person with a severe disability.Special Disability TrustsThe benefits of a Special Disability Trust are:that a gifting concession of up to $500,000 combined is available for eligible family members of the principal beneficiary andthat an assets test assessment exemption of up to $596,500 (indexed each year) is available to the principal beneficiaryTo be eligible to be a principal beneficiary, the disabled person must meet the definition of severe disability
What is a Special Disability TrustA Special Disability Trust is a trust that can be established during your lifetime or in your Will for the benefit of a person with a “severe disability” (Principal Beneficiary) to pay for:Their reasonable accomodation and care needs; andOther purposes for their benefit as permitted by the relevant legislation.A Special Disability Trust must meet the legislative requirements for the available concessions to apply.
Who is a person with a severe disabililtyA person over 16 who can establish:A level of impairment that meets the criteria for a disability support pension, invalidity service pension or invalidity income support supplement; andA disability that would, if the person had a sole carer, qualify the carer for carer payment or carer allowance, or is living in a state funded accommodation for people with severe disabilities; andThey cannot work for more than seven hours a week in the open labour market due to their disability.A person under 16 who is “profoundly disabled child” under the Social Security Act.
What is a reasonable accommodation and care needs.A Special Disability Trust can only pay for :Reasonable cost of accommodation needs of the Principal Beneficiary;The reasonable care needs that arise our of the disability of the Principal Beneficiary;The Principal Beneficiary’s dental and medical expenses, incl. membership costs for private health funds; andA limited level of discretionary spending not directly related to care and accommodation needs of the Principal Beneficiary . This is capped each financial year. The cap is CPI indexed every 1 July. The cap in the 2012/13 Financial year is $10,500.
Who can contribute to a Special Disability TrustAnyone can give to a SDT. However, the Principal Beneficiary and their partner can only do so if the gift is funded by:Assets the Principal Beneficiary received under a will; or A superannuation death benefit received by the Principal Beneficiary,And the funds are transferred to the trust within 3 years of their receipt by the Principal Beneficiary.Any contribution to the trust must be an unconditional gift.
[3.111.01] Explanatory MemorandumThis clause provides an exemption from duty for a transfer of, or an agreement for the transfer of, dutiable property made to a special disability trust as provided for by section 1209L of the Social Security Act 1991 (Cth) where there is no consideration for the transfer.A special disability trust is one established for a beneficiary that has a disability as a result of which he or she is not working, and has no likelihood of working, for a wage that is at or above the minimum wage, or if the beneficiary is under 16 years of age, has a profound disability. This exemption is a change in policy and is in accord with the recommendation of the State Tax Review.
Special Disability TrustsEstablished by parents and immediate family members to plan for the future care and accommodation needs of a person with a severe disability.Special Disability TrustsThe benefits of a Special Disability Trust are:that a gifting concession of up to $500,000 combined is available for eligible family members of the principal beneficiary andthat an assets test assessment exemption of up to $596,500 (indexed each year) is available to the principal beneficiaryTo be eligible to be a principal beneficiary, the disabled person must meet the definition of severe disability
Special Disability TrustsEstablished by parents and immediate family members to plan for the future care and accommodation needs of a person with a severe disability.Special Disability TrustsThe benefits of a Special Disability Trust are:that a gifting concession of up to $500,000 combined is available for eligible family members of the principal beneficiary andthat an assets test assessment exemption of up to $596,500 (indexed each year) is available to the principal beneficiaryTo be eligible to be a principal beneficiary, the disabled person must meet the definition of severe disability