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Trusts - The Final Frontier

Published on 10 Jul 2008 | Took place at Kooyong Tennis Club, Melbourne, VIC

The use of trusts for active enterprises and passive activities continues to grow. Unfortunately, too many advisors recommend trusts to achieve a taxation outcome without a proper understanding of the rules relating to their use.

For example:

  • how is income and capital gains dealt with by the trust?
  • how do you extract value from the trust?
  • is it possible that you might have a trust without realising it?
  • is it necessary to make a family trust election?
  • when should or shouldn't it be made?
At this event, Eugene Berkovic looked at all of the relevant issues relating to trusts - both from a legal and practical accounting view.

Individual sessions

Trusts - The final frontier

Author(s):  Eugene BERKOVIC

This paper covers:

  • Tax treatments of trusts
    • practical treatment - trustee or trust registered for TFN, ABN etc
    • flow through of tax attributes
    • treatment of losses / imputation credits
  • Issues to consider when reviewing family trust deed
    • powers of trustee
    • "net income" definition
    • streaming provisions
    • distribution of corpus
    • role of appointor
    • classifying beneficiaries - what is the range of potential beneficiaries?
  • Current tax issues involving trusts
    • application of Division 7A
    • trust loss rules - need to elect to be a family trust / nomination of test person/family trust distribution tax
    • CGT on disposal of assets, including small business concessions and distribution requirements to satisfy small business CGT conditions
    • "grouping" requirements under small business CGT net asset value test
    • succession planning issues
    • proportionate v quantum approach
    • resettlement of trusts
    • in specie distributions - stamp duty exemption
    • separation of capital and income entitlements under hybrid trusts.
Materials from this session: