SIS Reg 13.22C Related Unit Trust

About Product

An SMSF cannot hold an investment in a related trust, with the exception of the special purpose SMSF 13.22C Trust.

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General Information

An SMSF cannot hold an investment in a related trust with the exception of the special purpose SMSF 13.22C Trust.

A SMSF 13.22C Trust can be wholly owned by a SMSF and not be an in-house asset where there is no borrowing, no interests in another entity, cannot run a business, no charge on the assets of the company and any lease of property to a related party must be business real property and not residential property.

Benefits

Easy to understand and complete
Not an in-house asset
Can be transferred from a related party who holds shares to a related SMSF
Cannot run a business
But watch limitations on what the Fund can and cannot do

Frequently Asked Legal Questions

How does it differ a normal related party trust?

If the Trustee of a SMSF holds more than 50% of the equity of a trust, the investment is an in-house asset. The Trustee will be penalised. If the trust has in-built restrictions as prescribed by SIS Regulation 13.22C then it is exempted from the in-house assets, even where the SMSF holds all the units in the unit trust.

Can the Trust be owned by a related trust or party as well as the SMSF?

A related party can also hold units in the SIS Reg 13.22C Trust if the SMSF does not have the capacity to own the trust outright. Plus the underlying units may be transferred to the SMSF as a contribution or sale without breaching section 66.

How long does this document take to assemble?

Depending on the complexity of the data, this document should take approximately 30-50 secs to assemble. If you experience timing outside of this please contact Support via the Surge app, alternatively please read this article for troubleshooting tips https://info.lightyeardocs.com.au/supportcentre/troubleshooting-longer-assembly-times-timeouts .

Is this document a legal document?

All master documents have been signed off by Abbott & Mourly lawyers. Tony Anamourlis of Abbott & Mourly advises that “at no time, due to inbuilt legal protection and security measures can a user change or amend a document on the LightYear Docs platform that has been signed off by a practicing solicitor. To do so would result in the user drafting a document of a legal nature and engaging in the provision of legal services. In addition, it would be a breach of copyright. In our opinion when completing the form fields through the LightYear Docs platform, users and their employees are merely carrying out an administrative task which is not the provision of legal advice.”

However in some complex areas such as the insertion of a varied range of client instructions into a Will or other such documents the user must be mindful of the extent to which a document is being drafted by the user rather than merely the administrative task of completing a form where the relevant fields are inserted into the reviewed and signed legal document provided by Abbott & Mourly.

The above advice is born out of numerous cases dating back to Re Sanderson, Ex parte Law Institute of Victoria [1927] VLR 394, 397 where the Court held:

“if a person does a thing usually done by a solicitor, and does it in such a way as to lead to the reasonable inference that he is a solicitor – if he combines professing to be a solicitor with action usually taken by a solicitor – I think he then does act as a solicitor.”

Likewise in ACCC v Murray (2002) 121 FCR 428, 448 where Murray was building a franchise business that involved the legal writing and drafting of Wills from scratch based on the client’s personal circumstances. The Court held that this process was legal work.

Is the document easy to read?

All LightYear Docs products are written in plain English and assessed for readability. If at any time you come across any errors, please contact support@lightyeardocs.com.au.

What lawyers sign off on the LightYear Docs documents?

All LightYear documents are prepared and signed off by Abbott & Mourly from Melbourne, Sydney and Brisbane.

Are the LightYear Docs documents reviewed regularly?

All LightYear Docs documents form part of the LightYear Docs internal review process. We review all documents at least annually or when required to do so due to changes in legislation. Further details of this process and a review schedule is include on this website.

Can I get a sample of this document?

Yes, please email support@lightyeardocs.com.au to request a sample document for you to review.

Stamping and Lodgement of Trusts

The fees and stamping requirements for establishing a trust deed vary throughout Australia, and the duty payable also varies depending on the type of property that is held by the trust. Please contact our partners at Eventum Optimum (EO) on info@eventumoptimum.com.au for more information on when stamping is required (in what jurisdictions) and the fees/duties payable. EO are able to provide this service to you.