International Family Business Blog

NSW Supreme Court decides new trustee in Hope Margaret Hancock Trust saga

Photo - (AAP: David Moir)

In this long running case against multi-billionaire Gina Rinehart by her children, Justice Brereton today "...appointed Ms Bianca Rinehart trustee of the Hope Margaret Hancock Trust in place of her mother Mrs Gina Rinehart, and ordered that Mrs Rinehart deliver up the trust documents and account to the new trustee." Bianca Rinehart is Gina's eldest daughter.

The Hope Margaret Hancock Trust was established by Gina's father for the benefit of her four children (his grandchildren). The deed appointed Gina as sole trustee and she maintained a tight control over the trust and its income. Three of the four adult children claimed that Gina had, inter-alia, managed the trust in a manner inconsistent with the obligations and responsibilities of a trustee.

It is said that the assets of the trust are valued circa A$4 billion. However, it is unclear whether the decision will free-up a cash windfall for the beneficiaries because investment decisions made by Gina during her trusteeship may effectively limit the flow of cash into the trust.

The dispute over the trust and its control has split the family and several of the children appear to have suffered financial hardship and disruption to their personal relationships.

See Judgement Summary:

Premium Investor Visa - Further Details

The Australian Government hasprovided some additional details about the new Premium Investor Visa (PIV) that is mooted to be introduced on 1 July 2015 and will supplement the existing $5 million Significant Investor Visa (SIV).

The Government has indicated that the visa will target “ ..talented entrepreneurs and innovators. The PIV will offer a more expeditious, 12 month pathway to permanent residency than the SIV, for those meeting a $15 million threshold. The PIV will be available at the invitation of the Australian Government only, (emphasis added)with potential recipients to be nominated by Austrade. This programme will be rolled out over the next year, focussing on attracting a small number of highly talented and entrepreneurial individuals.  States and Territories will play an important role in helping to identify potential applicants.”

It is expected the rules for both the SIV and PIV will close a loophole that allowed applicants to borrow against the qualifying investments they made in Australia and either repatriated the funds or diverted them to tax haven centres.

Australian Budget moots clarification of anti-avoidance rules to target BEPS

Australia’s Treasurer Joey Hockey has announced a proposal to amend the Part IVA general anti-avoidance provisions in an effort to ensure it applies to the 30 biggest multi-nationals operating in the country. The major concern is the use of strategies that ostensibly allow big organisations to structure their onshore operations as branches that escape the ‘permanent establishment’ rules. 

Australia to get Serious Financial Crime Taskforce

Australia's Treasurer Joe Hockey today announced a new permanent body to be called the Serious Financial Crime Taskforce (SFCT) would replace the existing multi-agency Project Wickenby offshore tax evasion task force.

The new SFCT will undertake "...investigations and prosecutions that will address superannuation and investment fraud, identity crime and tax evasion". The Government has committed A$127.6 million for SFCT operations for the 2015-2019 fiscal years. It will include "...the Australian Taxation Office, Australian Crime Commission, Australian Federal Police, Attorney-General's Department, Australian Transaction Reports and Analysis Centre, Commonwealth Director of Prosecutions and Australian Customs and Border Protection Services".

Although no specific inquiry powers have yet been mooted for the SFCT, the Australian Taxation Office and Australian Crime Commission already have extensive inquisitorial powers that over-ride common law privileges against self-incrimination. Together, these agencies also benefit from a wide range of information gathering capabilities including Australia's extensive international information sharing agreement network.

It is noteworthy that in his announcement, the Treasurer specifically stated, "This type of crime poses a genuine threat to national security". This comment raises the prospect of the task force possibly having access to the resources of Australia's various security agencies (Australian Security Intelligence Organisation, Australian Secret Intelligence Service and Australian Signals Directorate).

International advisors dealing with financial transactions (including tax planning) involving Australian individuals and entities will certainly need to be very aware of their "know your client" obligations. The establishment of the SFCT 'ups the ante' on ensuring that all financial and tax planning should be able to withstand close judicial scrutiny. Having top-level multi-disciplinary advisory teams in place would now seem to be essential.

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