Forum Replies Created
As I was dozing of I came to a resoluation. My grandfather recently told me that he updated the will so that my father would be an equal shareholder of his company to my grandmother if he dies before her. But that was done with the solicitor (has the will) not the accountant who has the trust deed. My understanding is that the roles of the various people in the trust is just as, (if not more) important than the directions on the will. After all, the will directions do not assign control of assets held in a trust, they control assets held in the name of the testator at the time of his/her death.
I also do remember you mentioning that if you have two trustees then you may have two appointers. (i,e, the grandfather and grandmother).
Could the trust be structured in such a way so that if my grandfather passes first then my father takes the role of my
grandfather as appointer (for 50% of legal control over trust) and my grandmother remains the appointer for the other 50% legal control of the trust?In which case my father and my grandmother would have equal control over the trust.
In a nut shell I just need to explain this to my grandfather so that the directions on the will correlate with the instructions on the trust deed in regards to the way in which upon his death the roles of the appointer/s are given. The only way to do this effectively is to have two appointers.
Seeing as they both dislike each other tremendously its important that the role of appointer is not given soley to any of them as either way they may well just cut each other (and the relevant families!) out.
Also please help me correct any incorrect terms used in this as I may very well use this message as a template for explaining all this to my grandfather and they may use it to propose to the accountant.
Ive just been learning about bucket companies. If all the beneficiaries in a trust are paying the top marginal rate then you may divert extra profits into these. The tax rate on this is capped at 30%. Im not sure about this but my understanding is that you may direct this back to any of the beneficaries?
Yeh, prooves how much we learn at school. Some accountants dont really know much about trusts at all. (my partners accountant for example)
Oh, you mean "Info" is that were you learnt what you know about trusts?
Okay, thanks Terry. I will get back to you with more information (Hopefully in the comming weeks!)
Also, do you know of any good books on Family trusts I could give me Grandad to read?
As mentioned I gave him the one by N.E. Renton (2002). Do you know any more or more recent ones?
"But there may be ways to include you via other methods"
Can you tell me about any of these?
Yes, I know for a fact there is a very large pre1985 asset in there with no capital tax payable. That leads me to another questions. Do you pay capital gains tax on property held in a trust purcahsed before 1985?
Yes, well if it come to that and my father ended up the appointer then we would include me and obviously my father as a beneficiary.But the existing deed would need to be ammended.
Also I dont know if they have had the deed updated. I would have thought the accountant should keep on top with managing such important changes such as GST!
If the appointer happens to be both of them, it means that whichever one of them dies first then the remainder is the appointer,
If its just one, well then I imagine it would be my grandad in which case I just want to know who would be the appointer to be
in the event of his death is.Im not listed as a beneficiary of the trust, therefore I dont have any legal rights to view it without permission of both trustees. If it was up to my grandfather I would be a beneficiary but my grandmother opposes this view. In her veiw children are not really supposed to be beneficiaries of the trust.
(i.e. wealth of the trust should just include husband and wife). My grandmother kinda runs my grandfathers life in that respect
as she tends to influence/control his desisions.Also, given that the permission of all trustees is needed in order to veiw the trust deed i gather another trustee would not be a company as I would need the permission of that person to?
Oh, right. Thats good. My grandfather really dosent understand the trust. I gave him a copy of family trusts by N.E Renton to read and he is reading it. He dosent even know what is a trust deed!
It turns out he made the trust 35 years ago when a Jew introduced it to him. If both my grandparents are trustees I suppose it dosent really tell me much about who the appointer is. I think it would be one of the accountants or one of my granparents (given you can be a trustee and appointer)Also it means that perhaps a company is not the trustee? Given you would not have three trustees…..???
Spoke to the accountant today about the trust deed
Hello YYY accounting
I would like you to have a look through your files for a copy of XXX Family trust, trust deed. Once you find it if possible I would like you to make a copy of it at which point I will organise a time to bring Mr XXX (my grandfather) into your office to pickup a copy of it.
Many ThanksIshtvan
Reply- (from YYY accounting)
Sorry Ishtvan we needed the permission of both trustees and I have spoken to Mrs XXX and she said we did not have permission to give you any information regarding the trust.
My question- How can there be two trustees? Is this commonly done?
Okay, thanks. You answered my question.
Well to help, binding is (The trustee MUST distribute funds in a certain way) and non binding is (The trustee has discretion at hand when distributing funds)
I read someone previously talking about binding nominations for a will. Which translates to me as that if the will is binding then the trustee of the trust (If assets in trust) OR the executor MUST distribute funds in a certain way.
Or is binding and non binding only relevant to suppermannuation funds………
My question is asking if a will which is written by someone with testamentary capacity is equivalent to a binding nomination, i.e (Trustee or executor) MUST distribute assets/funds in a certain way.
Or are there other forms/procedures you should follow to make a will binding….?
Thanks Terry
30,000 is correct and according to this one you get $1500 in your claim if you earn anything under that amount (30K). As you earn over this amount it gradually reduces untill you earn 67,500 untill you get nothing back.
Do you have to put a separate applicaiton in to get the LITO or does the accountant know to do this automaticlaly with your tax return?Terryw wrote:She has to overcome the PSI rules but it could be possible to set up a consultancy firm.I wouldn't say it outright illegal. Usually income if it is personal services income will be taxed in the hands of the individual even if it is received by a trust or company. If you can overcome the rules you can have it via the trust.
Terry,
What is a consultancy firm?
Is this an example of what your talking about
http://www.entrepreneur.com/startingabusiness/businessideas/startupkits/article41384.html
luke86 wrote:I just had a look at the Pat IVA. It appears that you would not be allowed to purely 'stream' your parters income through a trust and distribute it to yourself to save tax.From the Part IVA document:
In the absence of unusual features, therefore, Part IV A would not
apply to such husband and wife partnerships. The sort of unusual
features that could see Part IV A apply include where the:– income generating activity was in reality a disguised
employment arrangement, or
– use of the partnership is prohibited by regulatory or other laws.In employee?like arrangements, provisions in the income tax law
which specifically deal with the alienation of personal services
income may apply in any event. This would mean that the
partner performing the main bulk of the work is taxed on all
of the partnership income. In such cases, Part IVA would have
no application.Reading the above, it appears that your husbands work is in fact a disguised employee arrangement. He is getting paid as a contractor although in reality he is an employee (I could be wrong though as I dont really know the nature of your husbands work).
I think you really should talk to a good accountant as they may have a way around this so you can stream the income to save tax.
Cheers,
LukeYes, your right. Obviously the arrangement in order to be professional would have to be between an "employee and an employeer" arrangment and not a husband and a wife. I realised that last night. So if your smart so long as your not acutally registered as a married couple you should not have any problems. We are going to have a talk to some professionals to find out their opinions on the matter.
Thats interesting. Here is the calculator.
http://calculators.ato.gov.au/scripts/axos/AXOS.asp
So if you negatively gear your income right down to 16,000 then you would pay no tax on the first 16,000.
Do you have to apply for and put a form in for the low income tax rebate, or does it go through automatically?Thanks Terry, dont worry about the last sentence. It makes sense to me. Thanks for the advice on low income tax rebates.
Thats a new thing that went through in 2010 isnt it?
