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Proposed changes to Division 7A
The perceived complexity of Division 7A has led to calls over many years for the provisions to be re-written and simplified. These calls for simplicity (combined with the Tax Office issuing controversial Taxation Rulings in relation to the Division 7A treatment of UPEs) resulted in the Government commissioning a Board of…
2 min read
Trust deeds – when do they need to be updated?
One question we are commonly asked is whether family trust deeds need to be updated on a regular basis, in the same way that many SMSF deeds are routinely updated every 2-3 years. While routine family trust deed updates are not as common as SMSF deed updates, trusts are subject to...
2 min read
Similar or the same? New tax loss measures in place
The Treasury Laws Amendment (2017 Enterprises Incentives No. 1) Bill 2017</em> finally passed both houses of Parliament earlier this year (in February 2019), having first been introduced as draft legislation in March 2017. The Bill introduced a new ‘similar business test’ which can be applied when working out whether an entity’s…
3 min read
Gift and loan back arrangements & an effective asset protection tool?
One popular asset protection strategy is known as a gift and loan back arrangement (also called an ‘asset mortgage’ arrangement). A gift and loan arrangement is best illustrated with an example. Assume we have an at-risk individual who owns an investment property valued at $800,000 in their personal name. The arrangement would involve…
2 min read
Binding financial agreements & can they protect trust assets from a relationship breakdown?
Binding financial agreements (BFAs) can be a powerful tool for protecting assets of the parties to a relationship, including assets held in a discretionary trust, in the event of a relationship breakdown. BFAs are a tool created by the Family Law Act</em> which allow parties (whether married or not) to agree…
2 min read
Asset protection and the domino effect
Following on from our previous article, the second aspect of asset protection which is critical to understand is the ‘domino effect’. The ‘domino effect’ occurs where a single entity owns multiple assets. In the event that a claim is made against that entity in relation to one specific asset, the single ownership…
2 min read
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