The retrospective effect of The State Revenue Legislation Further Amendment Act 2020 (NSW) on discretionary trusts 

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An important reminder that discretionary trusts that have already sold all residential properties before the deadline of 31 December 2020 could still be assessed for foreign surcharge purposes under the new NSW laws even if the trusts have already been wound up. The retrospective effect of The State Revenue Legislation Further Amendment Act 2020 (NSW) means the surcharge

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Reversionary pensions that don’t revert

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What happens where, at the time of death of the pensioner, a reversionary pension fails to revert because the nominated reversionary pensioner (an SIS Act dependant) is not eligible to receive income stream death benefits, for example where the nominated reversionary pensioner is an adult child of the deceased member. SIS sub-regulation 6.21(2)(b)(ii) and (2A)

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Local Government Super invests in mental health through partnership with SuperFriend

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NSW based Local Government Super (LGS) has announced its partnership with national workplace mental health organisation SuperFriend, effective 1 October. LGS was first established in 1997 to serve the superannuation and retirement needs of those working in NSW Local Government occupations. However, it is now open to any working Australian and manages approximately $12 billion

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Borrowing strategy banned from testamentary trust concessions

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Recently the government passed new laws which limit the treatment of income from a testamentary trust paid to minor beneficiaries of the trust as “excepted trust income” (which would be taxed at adult tax rates, including the all-important tax free threshold of currently $18,200 per year) only to property transferred to the testamentary trust from

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COVID-19 rent deferral IHA relief

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The ATO has issued draft SPR 2020/D2 which when registered will exempt SMSFs that allow a rent deferral to a related party tenant from the in-house assets (“IHA”) provisions in the following situations. The transitional measure applies to the 2019-20 and 2020-21 financial years. The moratorium A deferral of rental income under an arm’s length

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Superannuation proceeds trust: excepted income changes

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The recent Tax Act amendment on excepted income of testamentary trust distributions may potentially affect superannuation proceeds trusts (“SPT”) that are structured as testamentary trusts.  The amendment is an integrity measure to prevent assets unrelated to the estate being injected into the testamentary trust for the purpose of generating concessionally taxed excepted income.  Importantly, the

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ATO concerns with SMSF property development

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The ATO has issued SMSFRB 2020/1 (“SMSFR”) to highlight its main concerns in relation to SMSF property development.  It is comprehensive and traverses structuring, investment rules, NALI and the anti-avoidance provisions.  SMSF trustees that enter into property development projects must understand the complexity of such ventures and implement all the applicable rules from start to

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COVID-19: Summary on early release of superannuation

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The Coronavirus Economic Response Package Omnibus Act 2020 (“the Act”) received assent on 24 March 2020.  Schedule 13 of the Act amends the SIS regulations to make provision for COVID-19 temporarily early release of superannuation.  Application for this early release must be made within the period of 6 months starting on the day the new regulation

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ATO steps up its documentation requirements

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ATO investment strategy guidelines update The ATO has recently issued new guidelines in relation to SMSF investment strategy compliance.  The rules or legislation in this regard have not changed but the ATO has stepped up its documentation requirements. The adoption of a tailor-made investment strategy approach by the ATO will necessitate changes in some industry

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Beware estate planning issues with aged care

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As our population gets older (and lives longer), the likelihood that an elderly parent will need to go into a nursing home is increasing. Usually this requires having to make a payment to the nursing home for the privilege of being accommodated there – either by way of a Refundable Accommodation Deposit (“RAD”) or for

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