Tony Riordan's Articles

Trust streaming – where are we after the Greenhatch cases?

“Streaming” is the ability of the trustee of a trust fund to direct amounts or proportions of specific types of trusts receipts (capital gains, franked and unfranked dividends, interest, royalties, exempt income, foreign income etc) to specific beneficiaries. The trust fund effectively acts as a “conduit”, directing particular streams of income to particular beneficiaries as […]

Year-End Trustee Resolutions – 30 June 2012 “Pro-forma” resolutions now available for a limited time

We have prepared a package of draft year-end trustee resolutions to assist practitioners with their year-end drafting. The package deals with the resolutions necessary to deal with a variety of different types of deeds when “streaming” capital gains and franked dividends, including: “ordinary concepts adoption” deeds “section 95 net income adoption” deeds “ordinary concepts plus […]

Trustee resolutions for 30 June 2012 – A new ballgame

This year the deadline for trustee resolutions on distributions of income from trusts is 30 June (which falls on a Saturday this year). The Commissioner of Taxation has made it clear that this year there will be no time concessions. Trustees who have not made effective distributions by 30 June will be assessed under section […]

Revenue aspects of testamentary trusts

This is a paper delivered by Tony at the Law Institute of Victoria’s Succession Law Conference on 9 September 2011. It deals with some of the more important incomee tax, cappital gains tax and Victorian stamp duty issues arising out of the operation of discretionary trusts created by Wll.

Dealing With UPEs Which Arose In The 2010 Tax Year

This piece looks at some of the more important issues for dealing with unpaid present entitlements of discretionary trusts (UPEs) which arose at the end of the 2010 tax year in favour of corporate beneficiaries within the same family groups. This article is aimed at explaining the investment options set out in the Commissioner’s Practice […]

UPEs to companies arising after 16 December 2009 – analysis and comment

With effect from 16 December 2009 the Commissioner of Taxation has adopted a new approach in dealing with distributions of income made by trusts to related family companies where the amount of the distribution remains unpaid at the end of the tax year in which its made. In effect, the Commissioner now treats the unpaid present entitlement (UPE) owing by the trust as being a loan made by the company to the trust. Under Division 7A, if a loan is made by a company to a related trust, the amount of that loan will be treated as an unfranked dividend paid by the company to the trust in the year in which the loan is made. Prior to the Commissioner adopting this approach, it was common for trusts to “shelter” income at the corporate tax rate of 30% by distributing amounts to corporate beneficiaries. This step may now only be taken in accordance with the requirements now set out by the Commissioner is a new Practice Statement.

UPEs which arose in the 2010 Year – what to do before 30 June 2011

Unpaid present entitlements (UPEs) of corporate beneficiaries for the year ending 30 June 2010 are treated slightly differently from other UPEs in PS LA 2010/4 (Practice Statement). This Information Brief looks at what needs to be done before the end of the current tax year to protect clients’ (and advisers’) positions.

We have been awaiting the issue of a promised fact sheet from the ATO to clarify some important issues – not the least of which is clarification of when investment loan agreements for the 2010 tax year should be entered into.

We understand the ATO’s view to be that agreements must be entered into by 30 June 2011 to satisfy the Practice Statement. In the absence of a fact sheet being issued by the end of May, we have decided to publish our commentary.

Beware the pitfalls of super fund borrowing

Borrowings by self-managed superannuation funds (SMSFs) to purchase investment properties and other assets have become increasingly popular since changes to the legislation. Here we take a look at the dangers and pitfalls if the purchase is not structured properly and offer tips for funds wanting to borrow to purchase real estate. The prohibition on SMSFs […]

Estate planning – wills & family trusts

Geoff and Janet are “baby boomers” who have accumulated substantial assets in their own names. They also have a family discretionary trust which holds two investment properties and a ski flat. The trust has a corporate trustee. They made their wills 20 years ago, leaving everything to each other and then to their three children […]