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The super & estate planning Collection A concise collection of Super & Estate Planning materials A Tax Institute Publication taxinstitute.com.au Publisher Published in Australia in 2011 by The Tax Institute ABN 45008392372 Level 10, 175 Pitt Street, Sydney, NSW 2000 taxinstitute.com.au © The Tax Institute 2011 The Super & Estate Planning Collection ISBN: 978-0-9871124-8-4 Acts other than fair dealing Apart from any fair dealing for the purposes of private study, research, criticism or review as permitted under the Copyright Act 1968 (Cth), no part of this publication may be stored or reproduced or copied in any form or by any means without prior written permission. Enquiries should be made to the publisher only. Important disclaimer This publication is intended as an information source only. The comments and extracts from legislation and other sources in this publication do not constitute legal advice and should not be relied upon as such. All readers – whether purchasers of the book or otherwise – should seek advice from a professional adviser regarding the application of any of the comments in this publication to a particular fact scenario. Information in this book does not take into account any person’s personal objectives, needs or financial situations. Accordingly, you should consider the appropriateness of any information, having regard to your own objectives, financial situation and needs and seek professional advice before acting on it. The Tax Institute excludes all liability (including liability for negligence) in relation to your use of this publication. All readers must rely on their own professional advice. Currency The papers in this Super & Estate Planning Collection are accurate as at the date stated on each specific paper. Circulation You must not circulate this book in any other cover or binding than its original and you must impose this condition on any purchaser or acquirer of this book. Contents The Practical Control and Taxation of Superannuation Death Benefits Sam McCullough, Peter Worrall Lawyers The Opportunities and Traps for SMSF Investment Heather Gray, DLA Piper Taxation of Trusts – Are We There Yet? Ken Schurgott, Schurgott Noolan Pty Ltd SMSF’s Succession Issues Lyn Formica, McPherson Consulting Pty Ltd Significant Trust Issues in Estate Planning Arlene Macdonald, Edmund Barton Chambers SA Self Managed Super: Strategies & Investment Structures for Purchasing Business Real Property Peter Bobbin, Argyle Lawyers Pty Ltd Restructuring Trusts to Companies: What You Need to Know Craig Cooper, RSM Bird Cameron Estate & Succession Planning Bernie O’Sullivan, Maddocks 1 77 118 152 211 280 340 403 The Practical Control and Taxation of Superannuation Death Benefits Presented at the 26th NATIONAL CONVENTION March 2 2011 Written & presented by: Sam McCullough, Peter Worrall Lawyers ABSTRACT This paper reviews the key concepts and issues relevant to the control and taxation of superannuation death benefits, using brief case studies to illustrate each trust, legal and taxation consideration for an adviser and client. The paper explains and reinforces relevant rules and planning options, with analysis of the underlying legal and tax foundations relevant generally. The paper explains when a person may qualify as a “financial dependant” of the member, then expands upon the issues of eligibility for payment and concessional tax treatment. The eligibility of grandchildren to be paid pensions from superannuation death benefits after age twenty five introduces the topic of how payments can be made from superannuation generally. The paper then looks at the particular issue of estate planning for adult children who have disabilities. T