The Restructuring of Assets
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Due to the widespread abolition of death duties throughout Australia many people fail to engage in proper estate or succession planning. Many financial and accounting advisers still refer to restructuring of assets in an estate planning environment. Unfortunately this may have some unintended tax consequences because where a restructuring of assets takes place there exists the very real possibility that it will infringe the anti-avoidance provisions of the Income Tax Assessment Act 1936.
For the most part the community believes that income tax is solely restricted to a tax on income and although for the most part this is correct it also picks up capital gains, for example, capital profits. The purpose of the general anti-avoidance provisions is to protect the integrity of the income tax system by ensuring that arrangements that have been contrived to obtain tax benefits will fail. As the former Commissioner of Taxation, Michael Carmody said it "is applied in a practical way. It focuses on the substance of what has been done." The Tax Office looks at the particular arrangement and has four years within which it can amend a taxpayer's assessment and where these provisions apply a taxpayer will not only be up for the increase in tax but also for penalties and interest. Interest is referred to as the GIC (general interest charge) which is currently accruing at the rate of 13.12% having been recently increased.
Suffice to say there are a number of matters which need to be considered and whether it would be objectively concluded that you or any other person entered into a scheme or carried out a scheme or any part of it for the sole or dominant purpose of obtaining a tax benefit? This is an area pregnant with risk and where anyone considering restructuring their assets call LAC Lawyers for informed legal advice. Proper succession planning will avoid the problems associated with a restructuring of assets.
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The Restructuring of Assets Articles
Can my self managed superannuation fund (SMSF) buy property?
Date: September 01, 2010
Author(s): LAC Lawyers
In the past, Australian law with respect to Superannuation did not permit a SMSF to borrow money, or to mortgage the fund’s existing property BUT...
Essential Will Information
Date: November 08, 2006
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Many people today make their own wills and this approach is fraught with danger. A will is a written declaration that sets out how a person wants their assets to be distributed to their beneficiaries following death.
Estate Planning - More than just a matter of making a will - Part 1
Date: May 06, 2008
Author(s): LAC Lawyers
Many people believe that by making a will, they’ve sufficiently planned for their death. This is a good start. A lot of people don’t do even that. Some estimates suggest that as many as half the people in Australia that die each year do not leave a formal will.
Estate Planning - More than just a matter of making a will - Part 2
Date: May 06, 2008
Author(s): LAC Lawyers
As stated previously in Estate Planning - More than just a matter of making a will Part 1, preparing a will is an important part of estate planning. A thorough and well drafted will determines to a large extent how your affairs are to be dealt with when you’re gone.
Estate Planning - Self Managed Super Funds
Date: July 12, 2010
Author(s): LAC Lawyers
Retirement is not at the forefront of most working people’s lives but it should be. As Australia’ population is aging superannuation, and saving for retirement is becoming increasingly important.
Estate Planning - Trusts Created By A Will Funded By The Will Maker - Part 1: The Will
Date: January 13, 2010
Author(s): Michael Pickering B.A., LL.B. (Hons.), LL.M., M. A.
A will is a legal document in which the will maker sets out how and to whom his or her personally owned assets are to be distributed after death, the manner in which his or her estate is to be administered and the powers the executors are given.
Estate Planning - Trusts Created By A Will Funded By The Will Maker - Part 2: What is a Testamentary Trust?
Date: January 13, 2010
Author(s): Michael Pickering B.A., LL.B. (Hons.), LL.M., M. A.
Simply, a testamentary trust is a trust established by a will. Testamentary trusts can be mandatory or optional, fixed or non-fixed, flexible or protective, short or long-term, or charitable or non-charitable.
Estate Planning - Trusts Created By A Will Funded By The Will Maker - Part 3: Types of Testamentary Trusts
Date: January 15, 2010
Author(s): Michael Pickering B.A., LL.B. (Hons.), LL.M., M. A.
The main reason for creating a beneficiary controlled testamentary trust is for protection of the principal beneficiary, particularly in a situation of relationship breakdown of marriage or de facto partnership. With the beneficiary controlled testamentary trust, there is considerable protection of assets from the primary beneficiary’s hostile family members.
What to expect when you call LAC Lawyers
Date: December 13, 2006
Author(s): LAC Lawyers
LAC Lawyers is a full service firm dedicated to the provision of superior legal services in Australia. Our aim is to provide unrivalled client satisfaction coupled with high quality service and advice. When you call LAC Lawyers our friendly reception staff will spend time with you to identify the area of law your enquiry relates to then pass you on to one of our qualified solicitor's who can help you.
Wills, Probate & Estate Disputes - Will Kits
Date: June 04, 2010
Author(s): Carol Grimshaw LL.M., B. Legal Studies, Adv. Dip. Bus.
Your Will Last Will and Testament (Will) is your final legally binding communication to the world including those you love. You should ensure that expression is tailored to meet the whole of your circumstances.