We are often approached by clients or accountants with problems relating to their trusts – sometimes the deed has been lost or damaged, or the trust was established some time ago and the terms need to be updated. An issue that has become increasingly common in recent years (particularly following the GFC) is that where a trustee company goes into liquidation or has been deregistered. This can become quite a complex issue to resolve, particularly when the trust owns real property, or when the trust is a self managed superannuation fund. This issue was also recently considered by the Queensland Court of Appeal in Thorne Developments Pty Ltd v Thorne & Anor  QCA 63 (Thorne).
Discretionary trusts (often referred to as family trusts) are a very common method of holding assets in Australia, and are used to hold property and other financial assets and also as a way to own and operate small businesses.
For parents and other family members of a person with a disability, the question of how their family member will be cared for if they are no longer able to do so is a critical one. Special Disability Trusts were introduced in 2006 to allow parents and immediate family members to plan for the current and future care and accommodation needs of a person with a severe disability or medical condition.
Provided that it has been properly drafted, a special disability trust will attract concessions from both a taxation and social security perspective, for both the beneficiary of the trust and the family members who contribute.
A number of states have introduced foreign owner surcharges on duty and/or land tax for acquisitions and ownership of certain types of land by ‘foreign persons’. New South Wales and Victoria both have land tax surcharges, while Queensland, New South Wales and Victoria all charge a surcharge on duty. Foreign owner surcharges can mean additional duty of up to 8% of the purchase price (on top of the usual duty rates) and additional land tax of up to 2%.
The benefits of wills incorporating testamentary trusts are reasonably well known within the estate planning community, and awareness of them is becoming more wide-spread generally. Estate Proceeds Trusts are less well known.
Every few years proposals are made about significant taxation reform on discretionary trusts (commonly referred to as ‘family trusts’). From the entity tax proposal of the early 2000’s, to the recent submissions made by KPMG to phase out discretionary trust access to the 50% capital gains tax discount.