During the week, due to a rather unfortunate set of circumstances, I was reminded of a very important provision under the Corporations Act.
The situation broadly was as follows:
1. The sole director of a number of companies suddenly passed away.
2. A number of third parties (including a financier) questioned representatives of the deceased director’s estate about the authority for the company to continue to act and in particular, requested copies of the deceased’s will.
3. The deceased director in fact died without a will.
While there will be a number of issues that arise in relation to the director dying intestate (including the way in which the shares in the various companies are to be distributed amongst the family members), the immediate issue concerning who had authority to act as director of each company was resolved by a particular section of the Corporations Act.
In particular there is a section that allows the legal personal representative of a sole director company to take steps to appoint a new director.
While a fairly significant amount of additional paperwork has been required because of the absence of the will, the various concerns of the financier have at least been managed for the time being.
Given the number of public holidays over the next 10 days or so, unless a particularly time sensitive issue comes up, there will not be a post for a couple of weeks and today’s post is made ‘early’ (normally it would be posted next Monday).
Thursday, April 14, 2011
Monday, April 11, 2011
Government review of trusts – the journey continues
As most will know, the ongoing saga in relation to the taxation of trusts took another turn last week with Bill Shorten retracting his previous promise to ensure that post Bamford amendments would be implemented before 30 June 2011.
The government has now indicated that other than in relation to the streaming of income all other issues will not be considered further until the wider taxation review scheduled for October. This review has already been postponed once.
Practically the latest announcement may cause trust advisers to proceed with ‘core’ amendments (for example, ensuring that trustee minutes can be made after the end of a financial year) to trust deeds before 30 June 2011.
Two other important issues to note from last week in relation to trusts are that:
1. it now appears unlikely that there will be any change to the unpaid present entitlement rules released by the Tax Office before 30 June 2011.
2. the announcement that the Coalition will look to re-invigorate entity taxation (i.e. taxing trusts as companies) if they win the next election.
Until next week.
The government has now indicated that other than in relation to the streaming of income all other issues will not be considered further until the wider taxation review scheduled for October. This review has already been postponed once.
Practically the latest announcement may cause trust advisers to proceed with ‘core’ amendments (for example, ensuring that trustee minutes can be made after the end of a financial year) to trust deeds before 30 June 2011.
Two other important issues to note from last week in relation to trusts are that:
1. it now appears unlikely that there will be any change to the unpaid present entitlement rules released by the Tax Office before 30 June 2011.
2. the announcement that the Coalition will look to re-invigorate entity taxation (i.e. taxing trusts as companies) if they win the next election.
Until next week.
Monday, April 4, 2011
Important stamp duty changes in Queensland
For those advisers who provide guidance to trusts with assets in Queensland, relatively important changes have been announced to the Duties Act.
Previous posts have mentioned the difficulties surrounding corporate trustee duty, particularly in relation to the Commissioner’s discretion in determining whether it applies.
This discretion has now been removed.
Similarly, the discretion surrounding whether a trust is a 'family trust' and therefore able to get access to various concessionary provisions has also been removed.
At least on the face of the new provisions, it should be easier to implement rearrangements of family trusts (particularly in succession situations), however due to the vagaries of how many trust deeds are drafted, advisers will need to be extremely careful to ensure that any particular change does in fact comply with new rules.
It should be noted that the changes are only in bill form at this stage – in other words, they are not formally legislated as yet.
Until next week.
Previous posts have mentioned the difficulties surrounding corporate trustee duty, particularly in relation to the Commissioner’s discretion in determining whether it applies.
This discretion has now been removed.
Similarly, the discretion surrounding whether a trust is a 'family trust' and therefore able to get access to various concessionary provisions has also been removed.
At least on the face of the new provisions, it should be easier to implement rearrangements of family trusts (particularly in succession situations), however due to the vagaries of how many trust deeds are drafted, advisers will need to be extremely careful to ensure that any particular change does in fact comply with new rules.
It should be noted that the changes are only in bill form at this stage – in other words, they are not formally legislated as yet.
Until next week.