Special Disability Trusts

What happens if you are holding an asset for the benefit of caring for a family member with a disability, but it is creating negative consequences for you? It can be very frustrating when the assets you hold on behalf of the member with a disability affects your own payments.

A Special Disability Trust may be of some relief. The two main benefits of establishing a Special disability trust for a vulnerable person are:

• Protecting the person from exploitation from others and poor decision-making;
• Preserving the person’s receipt of the Disability Support pension.

Transferring a CGT asset to another person, entity or trust is likely to result in capital gains for the transferrer and stamp duty for the transferee in the case of real estate.

With a Special Disability Trust there is special relief when it comes to GST; there is no GST to pay! The cost base of the property will also change when the property is “gifted” to the Special Disability trust. It will be based on market value at that time. There is also likely to be no stamp duty to pay. (You will need to check with your state laws – for Queensland there will be nothing to pay). It is a win win for all involved.

 

Author

Naomi Aspromourgos