Tax Law for Trusts, Structures and Transactions

Kallan Lawyers advises on the tax consequences of legal arrangements: what a proposed structure, transaction or document will cost in tax and duty, and how to achieve the commercial outcome with less of it. Our principal is a lawyer with an accounting and taxation background, which is why this work sits naturally alongside our trust, commercial and estate planning practice rather than apart from it.

What this practice is, and is not

We do not prepare returns, keep books or provide compliance services. Your accountant does that, usually better and more cheaply than a law firm would.

What we provide is legal advice where the answer depends on tax:

• whether a proposed step is available under the trust deed or the constitution, and what it triggers
• how a transaction should be structured, and which entity should enter into it
• the capital gains tax and duty consequences of a restructure, a variation or a transfer
• whether a concession or rollover is available, and what conditions have to be satisfied
• how a document should be drafted so that the intended tax treatment actually follows
• advice you can rely on and, where the position is genuinely uncertain, a view on the level of risk

The useful question is rarely what the tax rule says. It is whether the document in front of you does what the rule requires.

Where tax and the rest of the practice meet

Trusts. Almost every meaningful change to a trust has a revenue dimension. Varying a deed can raise resettlement and capital gains tax questions. Distributions raise questions of entitlement, streaming and record keeping. Where the trust holds Victorian land, duty and land tax sit over everything, including surcharges that turn on who is capable of benefiting.

Companies. Money taken out of a private company by its owners is the single most common source of unexpected tax. Division 7A, unpaid present entitlements and loan accounts need to be addressed while there are still options.

Restructures. Moving a business between entities can be done without immediate tax cost in some circumstances and not in others. The federal position and the state duty position are separate questions, and a rollover that answers the first does not answer the second.

Estate planning. How assets pass, and to whom, changes the tax outcome. Superannuation death benefits, capital gains on assets passing through an estate, and testamentary trusts each have their own treatment.

Working with your accountant

Most of this work comes to us through accountants, and the arrangement that works best is the obvious one: they hold the client relationship and the compliance work, we give the legal advice and prepare the documents. Where we disagree with a position, we say so directly to the accountant rather than around them.

This page is general information about the kinds of matters we advise on. It is not legal or tax advice, and your own circumstances will change the answer.