Special Disability Trust (SDT) Simple Explanation 14 Sep 2016

Blog / Special Disability Trusts

What is it?

The Special Disability Trust (SDT) is a trust structure established to provide for a person with severe disability.

The benefit using SDT:

Concessional for means tested for Government Pension like Aged Pension or Carer Pension

  • Gifting Concession for eligible family member who donates to the SDT (up to $500,000)

  • Asset Test Exemption for beneficiary of the SDT.  Up to $647,500 as at 1st July 2016 
    The amount is indexed annually. 

  • Income Test Exemption for beneficiary of SDT of all trust income.


Taxation

  • Capital Gains Tax exemption for asset donated into the SDT

  • Unexpended Income of the SDT taxed at the beneficiary personal income tax
    rather than at the highest marginal tax rate


Steps to establish the SDT

  1. Receive approval from the Department of Human Services that the beneficiary qualified

  2. Obtain the Model Trust Deed

  3. Establish at Trust

  4. Donation the asset to the Trust

  5. Invest


Ongoing

  • Payment of income from the Trust to the beneficiary

  • Preparation of financial statement as at the 30th June every year by a qualified accountant

  • Keep records of expenditure if audited
     

 

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Disclaimer and Warning
The information above is of a general nature only.  It should not be used as a source to make financial decisions.  It's also important to note that the legislation and figures related to this topic tend to change regularly and therefore the information above may not reflect the current status.  We recommend that if you are looking for advice on this matter, you should contact
us

 

 


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SOLOMON FORMAN SMSF SPECIALIST ADVISOR SMSF SPECIALIST AUDITOR Forman Financial Services SOLOMON FORMAN CERTIFIED FINANCIAL PLANNERĀ® Forman Financial Services
 
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