Tuesday, December 13, 2016

Final Post for 2016 and Season's Greetings

With the annual leave season starting in earnest over the next couple of weeks and many advisers taking either extended leave or alternatively taking the opportunity to catch up on things not progressed during the calendar year, last week’s post will be the final one until early 2017.

Similarly, the social media contributions by both the View and Matthew will also largely take a hiatus until the New Year as from today.

Thank you to all of those advisers who have read, and particularly those that have taken the time to provide feedback in relation to posts.

Additional thanks also to those who have purchased the ‘Inside Stories – the consolidated book of posts 2010-2015’ (see - http://www.amazon.com/Matthew-Burgess/e/B00L5W8TGO/ref=sr_tc_2_0?qid=1413149165&sr=1-2-ent).

The next edition of this book, containing all posts over the last seven years, edited to ensure every post is current, indexed and organised into chapters for each key area should be available early in 2017. Very best wishes for Christmas and the New Year period.

Image courtesy of Shutterstock

Tuesday, December 6, 2016

Trust Cloning

A recent post focused on trust splitting as a useful tool to improve the administration and management of a discretionary trust http://blog.viewlegal.com.au/2016/03/trust-splitting-some-clarity-at-last.html

As has been widely publicised, trust cloning for family trusts was effectively abolished on 31 October 2008. Since 1 July 2016 trust cloning has been available for trusts that run businesses with an annual turn over of less than $10M – see http://blog.viewlegal.com.au/2016/04/tantalising-opportunities-for-trust.html (the $2M turnover test referred to there is intended to be $10M).

Interestingly, there are still situations when trust cloning might in fact be available, despite the tax concessions being removed on 31 October 2008.

Broadly, the main situations where we see trust cloning being used still are:
  1. Where there is no capital gain in relation to the assets to be transferred;
  2. Where the capital gains tax that would otherwise be triggered on the trust clone can be rolled over (for example, using the various types of small business CGT concessions or between testamentary trusts); and
  3. Where the trust cloning falls within the CGT exemption available for unit trusts.
Generally, there will be stamp duty payable in relation to a trust cloning arrangement to the extent there is dutiable property, although there are areas where there may be a duty exemption, including –
  1. In South Australia, for most transfers;
  2. In Queensland, for all transfers;
  3. In NSW, for business assets and land rich companies; and
  4. In Victoria, for business assets.
Image courtesy of Shutterstock