Trust asset revaluation strategies revisiting the practice
Source: Taxation In Australia Journal Article
Published Date: 1 Mar 2020
The seminal case of Fischer v Nemeske has accepted the effectiveness of asset revaluation reserves under trust law, reinvigorating the use of such reserves for the purposes of facilitating succession planning, asset protection and family exit objectives. This article explores the utility and mechanics of asset revaluation reserve strategies, including the common pitfalls that may arise when not properly implemented. The article also speaks to the pertinent taxation and commercial issues associated with those strategies that advisers must consider. This includes managing Div 7A obligations, being aware of the trust streaming implications, and maintaining the deductibility of interest on any borrowings associated with paying a beneficiary's entitlement from an asset revaluation reserve. The article concludes by envisaging a resurgence of activity in this area, particularly given the commercial outcomes that such strategies may achieve.
Sorry, this is subscriber only content.
To gain access to this material and much more - Subscribe Now.
(Note: Members can access Taxation in Australia journal articles without a Tax Knowledge Exchange subscription - please log in to access).
Already a Subscriber? Login now
Details
- Published By: Peter Slegers CTA, Josh Pascale
- Published On:1 Mar 2020
The material is copyright. Apart any fair dealing for the purpose of private study, research criticism or review, as permitted under the copyright Act, no part may be reproduced by any process without written permission from The Tax Institute.
Unless expressly stated, opinions are not that of The Tax Institute, which accepts no responsibility for the accuracy of any of the information contained within it.
The Tax Institute
(ABN 45 008 392 372 (PRV14016))
("TTI")
The Tax Institute is a Recognised Tax Agent Association (RTAA) under the Tax Agent Services Regulations 2009.
Copyright Statement
All materials provided on this site are protected by copyright and are owned by or licensed to TTI.
Except as expressly permitted by TTI or the copyright owner, any person or company who uses this site must not use, reproduce, redistribute, retransmit, publish or otherwise transfer, or commercially exploit, the materials or any information, software or other content, in whole or in part, which is available through this site.
Tags
Share this page