Below is Chapter 6 of our ‘Special Disability Trusts’ booklet. To read the other chapters of our booklet, click the links below:
- Chapter 1 – What is an SDT?
- Chapter 2 – What are the requirements of an SDT?
- Chapter 3 – What can an SDT pay for?
- Chapter 4 – What are the eligibility criteria of an intended beneficiary?
- Chapter 5 – Do you need medical reports confirming the disability?
- Chapter 7 – What is the effect of the gifting concession?
- Chapter 8 – What is the effect of the assets test assessment exemption?
- Chapter 9 – Are there beneficial taxation consequences?
- Chapter 10 – What are the administrative requirements of an SDT?
- Chapter 11 – Are there investment restrictions on an SDT?
- Chapter 12 – What are the ongoing obligations of an SDT?
- Chapter 13 – Summary
Please note that the information in this booklet is current as at the 2024/2025 financial year.
An understandably concerning question that families of people with disability often have is, “What will happen when I can no longer provide care?”
The key benefits of an SDT are:
- Forward planning: Legal planning can ensure that the ongoing needs of a beneficiary continue to be met, even in circumstances where family members or a primary carer can no longer provide assistance.
- Control of assets: A trustee has a legal obligation to safeguard and hold the assets for the benefit of the beneficiary.
- Social security:
- A gifting concession of up to $500,000 (combined) is available for eligible immediate family members of the principal beneficiary; and
- An assets test assessment exemption of up to $813,250 (current as at the 2024/2025 financial year and indexed each year on 1 July) is available to the principal beneficiary.
- Taxation benefits and exemptions:
- Net income on trust assets is taxed at a lower personal income tax rate; and
- Capital Gains Tax exemptions.
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The information contained in this post is current at the date of editing – 11 September 2024.