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Author Archive | Daniel Butler

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Close up of typewriter and Deed of trust

Discretionary trusts – variations and issues

Discretionary trusts are an extremely popular structuring and investment vehicle in Australia. In FY2016, there were around 850,000 trusts in Australia with assets of more than $3 trillion with one report predicting there could be more than a million trusts by 2022. In most Australian jurisdictions a discretionary trust can last up to 80 years (and in [read more]

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What to do about defects in SMSF deeds: a chain is only as strong as its weakest link

It is very common for an SMSF to be commenced by a deed of establishment. Then, when the governing rules need to be updated, this typically is done by way of a deed of variation. The deed of establishment, in conjunction with the deeds of variation including any change of trustee documents, are sometimes then [read more]

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SMSF deeds: how does your supplier rate?

While the provision of documents from non-qualified suppliers may appear to be a simple and low-cost approach, there are numerous risks involved for advisers and end-users. Introduction Most SMSF deeds are now probably supplied via non-qualified suppliers, with minimal lawyer input (eg the deed template may have had some input by a lawyer). This is [read more]

Contribution-reserving-are-you-aware-of-all-the-risks

Contribution reserving – are you aware of all the risks?

When discussing contribution strategies with clients, advisers should be mindful not to present contribution reserving as a straightforward exercise, as there are a number of practical issues and potential risks that should be carefully considered before proceeding with a contribution reserving strategy. This article discusses some of the common hurdles and risks to assist in [read more]

NALI –– unit trusts and draft LCR 2019/D3

SMSFs with units in unit trusts and NALI –– review and action may be needed

Introduction There are a considerable number of SMSFs that invest in private unit trusts. These unit trusts may include pre-99 unit trusts, unrelated unit trusts and non-geared unit trusts (under div 13.3A of the Superannuation Industry (Supervision) Regulations 1994 (Cth) (SISR)). The ATO’s draft Law Companion Ruling 2019/D3 (Draft LCR) outlines, among other things, the [read more]

Close up of typewriter and Deed of trust

Hill v Zuda Pty Ltd [2021] WASCA 59 — how long can a BDBN last for in ALL Australian jurisdictions?

The Western Australian Court of Appeal recently handed down its decision in Hill v Zuda Pty Ltd [2021] WASCA 59. It provides a strong answer to the question of how long a binding death benefit nomination can last for in ALL Australian jurisdictions. Facts Ms Hill was the only child of Alec Kumar Sodhy (Deceased). [read more]

Close up of typewriter and Deed of trust

Variation powers — lessons from Re Owies Family Trust [2020] VSC 716

Key facts The case of Re Owies Family Trust [2020] VSC 716 (Owies) provides many lessons for trustees and advisers dealing with discretionary trusts. This article focuses on one key issue raised in Owies, being the limited variation power that did not allow for a number of purported variations. Owies involved a dispute between the [read more]

NALI –– unit trusts and draft LCR 2019/D3

SMSFs – can all income be NALI?

Overview Broadly, SMSF trustees may assume that, in any related party dealing, NALI will apply unless they can prove otherwise given the ATO may issue an assessment and place the burden on the SMSF trustee to prove that it is excessive. One key criticism of the draft Law Companion Ruling 2019/D3 (the draft LCR) is [read more]