Notional estates

Laws in each state of Australia allow a family member or certain other dependants to challenge a deceased's will.  Such a claim is generally known as ether a family provision application or a testator's family maintenance (TFM) claim.  Whether a TFM claim is successful depends upon a range of matters – regardless of the outcome however, TFMs can be costly and emotionally debilitating for all parties involved.

Historically in all Australian states, a TFM claim could only relate to property that was owned by the deceased on the date of their death, putting certain property – such as trust assets or those owned by a spouse - outside the reach of a TFM claim.

In 2005, NSW introduced 'notional estate' provisions, which essentially enable a court to treat certain property that is not legally part of a deceased estate, as being deemed to be included and thereby open to attack by a TFM.  These provisions apply to NSW domiciled persons and any property located within NSW. 

For property to be part of a notional estate, ‘a relevant property transaction’ must have occurred, which in broad terms requires a positive act or omission that results in property being owned by someone other than the deceased. The offending transaction must have taken place within certain specified times before the date of death of the will maker.

All Australian states have been considering adopting similar notional estate provisions to NSW. The only other state to announce their likely approach has been Victoria.  In October 2013, the Victorian Law Reform Commission (VLRC) released its final report on Victoria's succession laws, and recommended that the NSW notional estate provisions should not be adopted in Victoria.

In September 2019 the equivalent body in Tasmania also rejected implementation of a notional estate regime in that state, unless and until there are uniform national rules introduced

This said, even otherwise where a state’s succession laws do not include notional estate provisions, there may still be means to attack assets not otherwise forming part of a deceased’s estate, including because of poor planning or due to sham, contrived or artificial transactions.

Until next week.

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Division 152 concessions and superannuation contributions

Given the number of changes to the small business concessions since their introduction back in 1997, it is understandable that many clients and their advisers lose track of the exact way in which the provisions work.

Last week, we were reminded when assisting another adviser about one critical aspect of the rules, namely that in many instances it is possible for taxpayers to delay a decision on whether to roll a capital gain over into a new asset, pay the tax, or make a contribution into superannuation for at least two years after the date of sale.  Indeed in many cases the deferral opportunity is closer to three years.

Obviously (as with most aspects of the small business concessions), care needs to be taken to ensure this planning opportunity is in fact available, however assuming the basic conditions are otherwise satisfied, the additional two to three year window is one that we are seeing regularly accessed.

Until next week. 

Image credit: Ken Teegardin cc

Where are we at with trusts?

As set out in earlier posts, and with thanks to the TelevisionEducation Network, today’s post addresses the issue of ‘Where are we at with trusts?’ at the following link - http://youtu.be/ZMgAI9edJ-4

As usual, a transcript of the presentation for those that cannot (or choose not) to view the presentation is below –

There's undoubtedly been an enormous amount of hysteria in recent times in relation to trusts generally, but particularly from a family law perspective. That hasn't been helped, because of a series of decisions that have come out from a family law perspective that have got a lot of media attention. 

The reality is there's also been an equal number of decisions and pronouncements from the Tax Office across issues, such as unpaid present entitlements, the taxation of trusts generally, resettlements of trusts. So you've had a whole range of things happening under both family law and wider commercial issues that have come out of the courts and out of the revenue offices. 

Then on top of that, you've had the government constantly looking to introduce new legislation, and making announcements about what may or may not happen in relation to the taxation of trusts. 

These three issues have almost created a perfect storm in terms of the amount of white noise that is around concerning where we are with trusts.

Until next week.

The Privacy Act and View Legal’s international footprint

A key component of the View Legal platform has been its dedication to early adoption of innovations that can help achieve the reason we built the platform – to create the kind of firm our friends would choose to use.

The 2014 changes to the privacy rules requiring more detailed disclosure of businesses' international footprint is a timely opportunity for us to revisit the extent of the contribution made to the View Legal platform from around the world.

Like most businesses, our success essentially depends on a network of specialists. As a law firm, we have an agreement with each service provider that receives personal client information which requires that they comply with the Australian privacy legislation.

A summary of our virtual team currently (although it sometimes changes on a weekly basis) is as follows:

1. we have lawyers based in the Philippines, regional Queensland, India, South Africa and suburban Brisbane.


2. our IT team has contributors in the Brisbane CBD, various locations throughout India and suburban Brisbane, together with cloud supported services throughout the USA and other confidential locations.


3. our marketing and collateral providers are sourced from various locations throughout Europe, USA, Canada, New Zealand, the Philippines and Australia.


4. one of our favourite social media consultants currently assists from suburban Brisbane, other than when she is travelling in locations such as Buenos Aires, Spain, Italy, Greece, the UK, France and Germany.


5. one of our research consultants currently works out of Argentina.


6. we have copy editors based in New South Wales, Victoria, the US and the UK.


7. we have administrative and accounting support from assistants in the Philippines, New Zealand, Canada, Pakistan and Sweden.


8. our primary word processing provider, who has been a critical part of our success, even in the years prior to View Legal launching, is based in India.

As the popularity of platforms such as Elance and Fiverr (that we have used extensively from their launch) continues to grow, we suspect the only certainty for our business is that our international footprint will also continue to grow.

This said, the growth of our international team has been matched by the growth of our Australian based team, and we take great pride in the fact that all staff enjoy flexibility around their work arrangements, and work remotely with access to physical office space on a needs basis only.

Until next week.

Image credit: Alan Cleaver cc

What constitutes dutiable value of a transaction?

With thanks to team member Hayden Dunnett, today’s post looks at the High Court decision in Commissioner of State Revenue v Lend Lease Development Pty [2014] HCA 51. The decision As usual, a full copy of the decision is available via the following link http://www.austlii.edu.au/au/cases/cth/HCA/2014/51.html.

In most jurisdictions, when a dutiable transaction such as a transfer of land occurs, duty is charged on the greater of the consideration or the unencumbered value of the land.

The Lend Lease transaction involved a complex multistage development between Lend Lease and the Victorian Urban Development Company (“Vic Urban”). Part of the development agreement included Lend Lease purchasing seven parcels or land, and in addition, making four payments for various infrastructure and service costs relating to the parcels of land.

The Commissioner argued the dutiable value of the transfer of each parcel of land to Lend Lease included the additional payments. Lend Lease on the other hand thought the consideration stipulated in the contract of sale for each transfer of the land was the dutiable proper amount.

The Court found in favour of the Commissioner, determining that what was received by Vic Urban was stipulated in the development agreement as a ‘single, integrated and indivisible’ transaction rather than in separate contracts of sale. Duty was therefore payable on the additional payments made by Lend Lease.

The decision confirms that there may be situations where the dutiable value of the transaction may be greater than the payment made for the asset itself.

Where a transfer is one part of a wider transaction, the transaction in its entirety should be considered to determine if any collateral agreements need to be included in determining the dutiable value of the transaction.

Until next week.

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Final Post for 2014 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 2015.

Similarly, both the View Legal and Matthew’s Twitter and LinkedIn postings 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, the various posts.

Additional thanks also to those who have purchased the various versions of ‘Inside Stories – the consolidated book of posts’ (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 five years, edited to ensure every post is current and organised into chapters for each key area should be available early in 2015.

Very best wishes for Christmas and the New Year period. 



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And another View Legal Apple and Android app launched

Following the successful launch earlier this year of the View Legal Directors Duties, Estate Planning, business succession and binding death benefit nomination apps, we have now developed and launched a further Apple and Android app.

The new app is in relation to Self-managed superannuation funds (SMSF) and can be downloaded via the following links –

1. iPhone - https://itunes.apple.com/au/app/smsf/id931264885?mt=8
2. Android – https://play.google.com/store/apps/details?id=view.legal.smsf

SMSFs can provide a range of benefits and opportunities not available via any other retirement savings approach.  

SMSFs are however heavily regulated and it is vital that fund members have a deep understanding across all relevant areas.

The SMSF app is designed to allow the user to narrow down some of the broad areas that might be relevant in relation to establishing, or updating, an SMSF.

Depending on the answers provided, the app generates a free white paper containing general information in relation to some of the issues that are often relevant.

Until next week.