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Trust Deed Upgrades

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A common question asked by Trustees of Self Managed funds is: “How often should I update my Trust Deed?”

In particular, we recommend that the trust deed has clauses that allow for the following issues to be dealt with:

  • Amendment of the Trust Deed,
  • The appointment of a corporate trustee,
  • The fund is able to accept in-specie contributions,
  • The fund is able to accept all types of superannuation contributions including; employer, salary sacrifice, non concessional and concessional contributions,
  • The fund is able to accept roll-overs from other complying funds.
  • The fund allows for the establishment of both pre and post retirement account based pensions (not just allocated pensions),
  • Payment of benefits on death, including Binding Death Benefit Beneficiary Nomination (both Lapsing and Non-Lapsing) and Reversionary Pensions,
  • Limited Recourse Borrowing Arrangements
  • Insurance strategies and flexibility on how to pay out insurance proceeds.

This is not an exhaustive list. If the current Trust Deed was prepared prior to 1 July 2010 it is highly likely that it will need to be updated. For deeds after this date but dated before 2015 a review by a qualified professional would be advised especially before any new associated fund paperwork is signed such as pension documents, binding nominations or investment strategies.

Previous changes to superannuation since 2007 that may disadvantage funds with an out of date deed or even pose compliance problems due to conflicting documentation are:

  • 2007 – borrowing with SMSF’s allowed, the ability to start account based and transition to retirement pensions introduced, changes to spouse splitting contributions, no tax on benefits paid to individuals over age 60, contribution caps introduced
  • 2009 – changes to rules surrounding investment in related unit trusts
  • 2010 – changes to borrowing within SMSF, now referred to as “limited recourse borrowing arrangement”
  • 2011 – deductibility of “own” occupation TPD premiums limited & changes to rules surrounding collectables and personal use assets
  • 2012 – the ability to refund excess contributions was introduced
  • 2013 – changes to taxation of income streams after death to ensure CGT discount not lost
  • 2014 – excess contributions tax penalties & changes to the types of insurance allowed to be owned by SMSF’s

 

This document is general in nature and should not be used as a substitute to advice by a licensed professional. Dolfinwise can be contacted on (07) 3832 5777.

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