After the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020 (Cth) (Act) was passed on 12 June 2020, all directors of Australian companies will need to be identified by a permanent unique number known as a director identification number (DIN). The main purpose of the Act is to:

• require that all directors have their identity verified as part of the DIN application process (includes alternate directors and company secretaries);
• require directors only have one DIN and prevent directors hiding behind aliases or variations of their name;
• prevent director identity fraud;
• apply a consistent regime across Australian body corporates, Aboriginal and Torres Strait Islander corporations, and registered foreign companies;
• further aid in the deterrence and penalise illegal phoenix activity; and
• impose criminal and civil penalties for non-compliance.
• impose criminal and civil penalties for applying for multiple DINs or misrepresenting a DIN being up to $22,200 (100 penalty units) and/or 12 months imprisonment.

When do you need to apply?

• Directors appointed on or before 31 October 2021 will be required to apply for a DIN before 30 November 2022;
• New directors appointed between 1 November 2021 and 4 April 2022 must apply within 28 days of their appointment.
• The resignation of a director will then only take effect from the date of notification and a director that fails to notify the ASIC of their resignation within 28 days may be held accountable.

How do you apply?

For Australian residents, the quickest way to apply will be online use the MyGovID app and then apply for the DIN at https://mygovid.gov.au/AuthSpa.UI/index.html#login noting that you will need the following information to complete the application.

• Tax file number
• Residential address as registered with the ATO
• Bank account details (as held by the ATO)
• Superannuation account details – including your member number and the funds ABN
• A dividend statement with the investment reference number
• A PAYG Summary issued in the last two years

If you do not have a MyGov ID, you can also apply by phone or by using a paper form however you will need to supply the following as proof of your identity:

• Certified Primary documents – one of the following:
  • Australian full birth certificate (extracts and commemorative certificates are not acceptable)
  • Australian passport (including passports that have expired in the past two years)
  • Australian citizenship certificate or extract from a Register of Citizenship by Descent
  • ImmiCard
  • Visa (if you are using a foreign passport but you are still in Australia).
• Certified Secondary Documents – two of the following:
  • Medicare card
  • Australian driver’s licence or learner’s permit. This must show your photo and signature, and the address on the card must match your details on the form.

For non-Australian residents, the application must be made either over the phone or by using a paper form and you will need to supply the following as proof of your identity:

• Certified Primary documents
  • Foreign birth certificate
  • Foreign passport
  • Australian full birth certificate (extracts and commemorative certificates are not acceptable)
  • Australian passport (including passports that have expired in the past two years)
• Certified Secondary documents
  • National photo identification card
  • Foreign government identification
  • Driver’s licence, as long as the licence address matches the address details on your application
  • Marriage certificate, but if you use this document to verify your change of name, you can’t use it as a secondary document
  • If you have changed your name, you must provide another document showing the change, such as a:
    • marriage certificate
    • deed poll
    • change of name certificate.

It is important to note that documents outside of Australia can only be certified by either:

• a notary public; or
• a staff member at an Australian embassy, high commission or consulate, including consulates headed by Austrade honorary consuls.

So make a note of the date and we recommend getting it done well ahead of time as there will be a rush to register late in the day. If you have any questions please call Tony Crilly or email us at info@perspectivelaw.com.

A thorough estate plan is even more important when you are dealing with vulnerable beneficiaries, such as someone who has a disability or is suffering from drug addiction or financial susceptibility.  Considerations can include retaining pension eligibility, ensuing the beneficiary has sufficient funds for their needs and keeping the funds protected from wastage.

Two main options include a special disability trust (subject to eligibility) and a protective trust.

Special disability trust (“SDT”)

An SDT provides for the care and accommodation of a person with a severe disability as defined in the Social Security Act.  They can be established during a person’s lifetime or pursuant to a Will provided the terms of the trust reflect the model trust deed endorsed by Centrelink.

SDTs can allow for income and assets means tested pension concessions.  All trust income is excluded from the income test assessment for the beneficiary.  An asset test assessment exemption applies, currently $700,250, and is indexed on 1 July each year.  The principal place of residence is also an exempt asset.  There are no limits on the amount of assets that can be held in the SDT, except that assets above the concessional limit will be included in the beneficiary’s assessable assets for determining eligibility for the disability pension. 

Anyone can gift assets to the SDT except for the beneficiary and their partner, who may only gift a bequest or superannuation death benefit within three years of receipt.  There is a gifting concession of up to $500,000 which applies to eligible family members of the beneficiary if that family member is also receiving or might be eligible for a government pension.  Additional contributions made by immediate family members are assessed under the usual gifting rules.

The primary purpose of an SDT is for the reasonable care and accommodation costs of the beneficiary.  However, the SDT may undertake discretionary spending not limited to the care and accommodation needs, provided it is for the benefit of the beneficiary.  There is a limit on the amount of discretionary spending which is currently $12,500.

To ensure the interests of the beneficiary are protected, there are strict reporting requirements and the SDT must be reviewed annually.  The trustee must provide annual financial statements to the Department of Human Services/Department of Veterans’ Affairs.  An audit may be requested by certain people, including the beneficiary and immediate family members.  The trustee can be either a professional trustee or two or more individuals. 

Protective trust

An alternative option is a protective trust.  This trust can be established where a beneficiary does not fit the eligibility requirements of a SDT and can be used for broader purposes as the trust is free of the restrictions imposed on SDTs.  Protective trusts can also be prepared during a person’s lifetime but most are established in a Will.  The asset and income exemptions that apply for an SDT do not apply to the capital or income of a protective trust.

It is not uncommon for the primary beneficiary of a testamentary trust to also be the trustee.  However, with a protective trust, a separate trustee holds the trust assets for the beneficiary.  They have the discretion to distribute income and capital to the beneficiary, subject to any terms specified in the trust deed or the Will.  The terms can be specific in relation to how much can be distributed or what the distributions should be used towards.  Alternatively, the terms can provide the trustee with wide discretion to create flexibility for changes in circumstances.  In some circumstances control of the trust can be transferred to the beneficiary upon a certain age or other condition. 

The choice of trustee is critical and two or more trustees may be preferable, such as a family member and an independent person such as an accountant.  A professional trustee can be appointed if there is no one suitable. 

Conclusion

To ensure that assets are protected for vulnerable beneficiaries, it is important that structures are put in place either during a person’s lifetime or on their death as part of their Will.  These structures can protect a beneficiary losing their disability pension or funds being wasted.  The type of trust to be established and the terms of the trust depend upon the needs and circumstances of the beneficiary. 

If you consider that an SDT or protective trust may be suitable for your circumstances, please contact Perspective Law on 07 3839 7555.